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SUPPLEMENT    TO   THE 


ANNALS 

OF  THE 

AMERICAN  ACADEMY 

OF 

POLITICAL  AND  SOCIAL  SCIENCE. 


SEPTEMBER,  1893. 


INLAND  WATERWAYS^ 

Their  Relation  to  Transportation. 


EMORY  R.  JOHNSON,  PH.  D., 

Instructor  in  Political  and  Social  Science  at  Haverford  College. 
I<a'  .-  Fellow  of  the  Wharton  School  of  Finance  and  BCconomy,  University  of  Pennsylvania 


PHILADELPHIA: 

AMERICAN  ACADEMY  OF  POLITICAL  AND  SOCIAL  SCIENCE. 


ENGLAND  :  P.  S.  King  &  Son,  5  King  St.,  Westminster,  Condon,  S.  W. 

FRANCE  :  I^arose  et  Forcel,  rue  Soufflot,  22,  Paris.    GERMANY  :  Gustav  Fischer,  Jena. 

ITALY  :  Direzicne  del  Giornale  degli  Economist:,  Rome,  Via  Ripetta,  102. 

SPAIN  :  Fuentes  y  Capdeville,  Madrid,  9  Plaza  de  Santa  Ana. 


Copyright,  1893,  by  the  American  Academy  of  Political  and  Social  Science. 


SUPPLEMENT  TO  THE 

ANNALS  OF  THE  AMERICAN  ACADEMY  OF  POLITICAL  AND  SOCIAL  SCIENCE. 

SEPTEMBER,  1893. 


INLAND  WATERWAYS, 


Their  Relation  to  Transportation. 


BY 


EMORY  R.  JOHNSON,  PH.D., 

Instructor  in  Political  and  Social  Science,  at  Haverford  College. 
Late  Fellow  of  the  Wharton  School  of  Finance  and  Economy,  University  of  Pennsylvania. 


PHILADELPHIA: 

AMERICAN  ACADEMY  OF  POLITICAL  AND  SOCIAL  SCIENCE. 


py 


CONTENTS. 


CHAPTER. 


I.  Introduction.     The  Renaissance  of  Inland  Navigation. 

II.  Classification  of  Inland  Waterways.     The  Way  They  Should 

be  Studied. 

III.  The   Present  Condition  of    England   and   American    Inland 

Waterways. 

IV.  Waterways  and  Railroads  as  Carriers. 

V.  Influence  of  Inland  Water  Routes  on  Railroad  Tariffs.   . 

VI.  Influence  of  Inland  Waterways  on  Railroad  Revenues.  ^ 

VII.  Under  What  Conditions  and  to  What  Extent  Canals  Can 

Compete  With  Railroads  in  the  Future. 

VIII.  The  Construction  of  Canals  and  the  Improvement  of  National 

Inland  Waterways  by  the  State  and  by  Corporations. 

IX.  Tolls  on  Waterways. 

X.  The  Methods  Employed  by  the  United   States  in   Improving 

and  Extending  Inland  Waterways.     The  River  and  Harbor 
Bill. 

XI.  The  Leading  Works  in  the  Process  of  Execution  Within  the 

United  States.     Proposed  Works. 

XII.  The  Nicaragua  Canal. 

XIII.  The    Economic    Significance  to    the    United    States  of   the 

Extension  of  Inland  Waterways. 


CHAPTER  I. 

INTRODUCTION.      THE  RENAISSANCE  OF  INLAND 
NAVIGATION. 

Transportation  is  a  subject  the  importance  of  whose  study 
needs  little  emphasis  at  the  present  hour.  Such  is  the 
organization  of  industrial  and  sociaLlife  that  every  person, 
be  his  activity  great  or  small  in  the  economic  world,  has  a 
direct  interest  in  the  development  and  improvement  of 
means  of  transportation.  We  no  longer  live  the  separated 
lives  of  former  times,  when  each  locality  was  sufficient  unto 
itself.  Society  is  becoming  a  unit  and  the  industrial  world 
a  single  complex  body  with  manifold  centres  specialized  for 
the  performance  of  definite  functions.  When  we  speak  of 
division  of  labor,  of  concentration  and  localization  of  indus- 
try, of  clearing  houses,  of  international  exchange  coinage 
and  arbitration,  we  are  simply  giving  names  to  certain 
phases  of  the  movement  toward  social  organization. 

The  thing  most  vitally  essential  to  an  organism  consisting 
of  many  centres,  or  organs,  having  specialized  functions 
upon  the  proper  performance  of  which  the  welfare  of  the 
whole  body  depends,  is  the  co-ordination  of  its  various  parts 
through  their  connection  with  .each  other  by  perfect  means 
of  communication.  In  this  way  only  can  each  part  receive 
from  the  others  what  is  necessary  to  its  fullest  activity,  and 
give  in  return  those  elements  which  make  for  the  life  of 
others.  The  higher  and  more  perfect  the  organism  the  more 
complete  must  be  the  co-ordination  of  its  parts.  So  with  _ 
modern  society.  It  requires  the  interchange  of  constantly 
increasing~quantities  of  goods,  and  the  connection  oMts 
many-^arts  by  efficien^means  of  transportation  ancTcommu- 
nication  is  a.  need  that  grows^everjstJ^nger.  More  tharTthis, 
the  expense  of  transporting  these  necessary  goods  becomes 
of  greater  moment  to  industry  as  processes  of  production  are 
improved  and  costs  are  thereby  reduced.  For  it  will  be 

(5)  " 


6  ANNAIvS   OF  THE   AMERICAN  ACADEMY. 

readily  seen  that  in  one  sense,  at  least,  the  analogy  fails 
between  an  organism  and  the  industrial  society  of  the  present 
time.  In  the  case  of  the  latter,  most,  though  not  all, 
special  functions  are  given  over,  not  to  one,  but  to  many 
industrial  centres.  Between  these  centres  with  like  functions 
exists,  in  many  cases,  strong  competition,  each  trying  to 
take  unto  itself  the  greatest  possible  sum  of  advantages  dis- 
regardful  of  the  interests  of  others  of  its  kind.  In  competi- 
tive industries,  prices  are  forced  down  so  low  that  but  slight 
changes  in  the  costs  of  transporting  raw  materials  or  finished 
products  often  mean  life  or  death  to  business.  Thus  it  is 
from  the  double  source,  from  the  growing  need  for  the 
exchange  of  goods,  and  from  the  increasing  significance  of 
freight  rates  to  the  weal  or  woe  of  industry,  that  the  import- 
ance of  the  transportation  problem  arises. 

Turn  where  we  will,  we  can  but  note  the  social  and  indus- 
trial effects  of  cheap  rates  of  transportation.  \,  These  results 
are  in^part  beneficial,  in  part  deleterious,  always  powerful. 
Cheap  passenger  rates  have  freed  men  from  the  chains  thaTA 
formerly  bound  them  to  the  locality  of  birth,  and  have  \ 
brought  them  into  contact  with  the  culture  and  science  of 
our  own  and  foreign  lands.  Cheap  passenger  and  freight 
rates  have  effected  great  changes  in  population,  have  enabled 
people  to  increase  rapidly  in  numbers,  have  opened  up  new 
lands  to  them,  have  gathered  them  into  large  centres  of 
trade  and  industry.  Cheap  transportation  in  the  United 
States  has  thrown  open  the  West,  and  at  the  same  time 
built  up  our  great  cities,  and  has,  it  is  none  the  less  true, 
made  the  crowded  condition  of  life  in  them  much  worse  by 
bringing  to  them  the  overflow  of  Europe  and  Asia  to  people 
the  slums.  The  good  we  delight  in  has  brought  with  it  a 
train  of  evils  whose  extirpation  social  reformers  are  laboring 
to  accomplish. 

Paradoxical  as  it  may  seem,  cheap  and  rapid  transit  is  one   ^ 
of  the  strongest  forces  by  which  overcrowding  and  the  other 
evils  which  together  make  up  the  low  standard  of  life  among  ^ 
the  dependent  classes  are  to  be  checked.     The  lower  classes 


RENAISSANCE  OF  INLAND  NAVIGATION.  7 

of  society  can  be  made  independent  only  by  raising  their 
standard  of  life.  This  obviously  requires  two  things,  that 
the  standard  of  life  shall  be  made  to  include  new  articles  of 
consumption,  and  that  this  enlarged  standard  shall  become 
so  firm  that  men  will  not  lightly  abandon  it.  The  fulfill- 
ment of  these  requirements  is  made  possible  by  cheap  and 
rapid  transportation,  for  it  increases  the  number  of  articles 
that  may  compose  the  poor  man's  range  of  consumption, 
and  in  manifold  ways  directly  and  indirectly  conduces  to 
strengthen  in  him  those  intellectual  and  moral  forces  by 
which  he  will  be  impelled  to  introduce  new  articles  of  con- 
sumption into  his  standard  of  living. 

It  needs  but  a  glance  at  the  map  for  one  to  realize  the 
significance  of  cheap  rates  to  the  industrial  progress  of  the 
United  States.  Our  wide  boundaries  include  natural 
resources  of  great  diversity.  The  raw  materials  of  the 
farm  and  mine  and  forest  must  be  carried  to  feed  far-distant 
manufacturing  industries,  while  the  denser  centres  of  popu- 
lation, still  largely  in  the  East,  must  obtain  their  food  from 
the  West.  Considerations  such  as  these  alone  enable  us  to 
comprehend  the  fact  that  the  railroads  of  the  United  States 
annually  transport  nearly  seven  hundred  million  tons,  and 
that  the  ton  mileage  of  the  traffic  by  rail  is  between  eighty 
and  ninety  billion  ton  miles  a  year. 

The  carriers  of  freight  hold  the  keys  of  trade.     During  "7 
the  year  1890-91,   over  thirty   iron   smelting   furnaces   of  ( 
eastern  Ohio  and  western   Pennsylvania  were   shut  down 
several  months,  because  the  railroads  could  not  give  them  a 
reduction  of  twenty-five  cents  a  ton  in  the  freight  rates  for 
coke  fuel.*    As  slight  a  reduction  as  a  mill  a  ton  mile  by 
the  railroads  in  their  charges  would  save  to  trade  nearly  a 
hundred  million  dollars  a  year. 

The  tonnage  of  inland  waterways  is  not  equal  to  the 
traffic  by  rail,  but  it  is  nevertheless  enormous.  Indeed,  it .' 

*  Cf.  Roberts,  p.  10.  Report  on  "The  Respective  Uses  of  Waterways  and  Rail- 
ways in  General  Transportation  in  the  United  States,"  to  the  Fifth  International 
Congress  on  Inland  Navigation. 


8  ANNALS  OF  THE  AMERICAN  ACADEMY. 

could  hardly  be  otherwise  with  the  presence  within  this 
country  of  such  water-courses  as  the  Hudson  River,  the 
Great  Lakes,  and  the  large  rivers  of  the  Mississippi  Valley. 
On  the  Great  Lakes  there  is  a  fleet  of  3700  steam  and  sail 
vessels,  with  a  net  registered  tonnage  of  1,250,000  tons.  In 
1891,  they  carried  63,250,000  tons  of  freight,  while  in  1890, 
the  ton  mileage  of  the  trafiic  carried  by  this  fleet  was 
18,849,681,384  ton  miles,  or  twenty-seven  and  a  half  per 
cent  of  the  ton  mileage  of  all  the  railroads  of  the  United 
States.  The  commerce  on  the  Great  Lakes  is  advancing 
with  rapid  strides.  The  tonnage  of  the  lake  marine  more 
than  doubled  during  the  five  years  from  1887  to  1892.  In 
1886,  the  net  registered  tonnage  which  passed  through  the 
St.  Mary's  Falls  Canal  was  4,250,000  tons.  In  1890,  it  had 
risen  to  8,250,000  tons  ;  in  1892,  to  10,000,000. 

On  the  16,000  miles  of  the  navigable  waters  of  the  Missis- 
sippi River  and  its  tributaries,  there  were  afloat,  in  1890, 
7445  crafts  of  all  kinds,  with  a  registered  tonnage  of  3,400,- 
ooo  tons.  During  the  year,  this  fleet  of  boats  carried 
30,000,000  tons  of  freight  and  11,000,000  passengers.  The 
Hudson  River  had,  in  the  same  year,  a  traffic  of  5,000,000 
passengers  and  15,000,000  tons  of  freight,  exclusive  of  the 
3,500,000  tons  that  passed  from  the  State  canals  of  New 
York,  by  way  of  the  Hudson  River  to  tide  water.  Adding 
these  figures  together,  they  give  a  total  tonnage  for  these 
four  waterways  alone,  of  112, 916,223  tons.  Such  is  the  traffic 
on  these  waterways,  while  they  are  still  practically  separated 
from  each  other.  A  great  increase  would,  of  course,  follow 
their  connection  by  navigable  ways  of  ample  dimensions. 

The  Pennsylvania  Railroad  is  the  greatest  freight  carrier 
of  any  road  in  the  world.  During  the  year  ending  June  30, 
1890,  it  carried  on  the  459  miles  of  its  main  line  69,036,245 
tons  ;  this  same  year  the  Reading's  main  line,  327  miles  in 
length,  had  a  traffic  of  15,625,482  tons,  and  the  New  York 
Central  and  Hudson  River  Railroad  had  29,473,879  tons  of 
freight  on  its  849  miles.  The  total  tonnage  on  these  three 
great  trunk  lines,  having  a  combined  length  of  1605  miles, 


RENAISSANCE  OF  INLAND  NAVIGATION.  9 

was  114,135,558  tons,  or  an  amount  very  nearly  the  same  as 
that  for  the  four  waterways  just  named.  If,  however,  the 
ton  mileage  statistics  could  be  compared,  the  waterways 
would  show  a  much  larger  ton  mileage,  because  ol  the : 
greater  distance  through  which  freight  moves  by  water. 
The  average  distance  which  the  freight  was  carried  that 
passed  the  Sault  in  1891,  was  820.4  miles  ;  the  railroad  freight 
of  the  United  States  moved  on  an  average  only  119.72  miles. 

It  is  interesting  to  compare  the  inland  navigation  in  the 
United  States  with  the  foreign  trade.  If  1889  be  taken  as 
the  year  for  comparison,  it  will  be  seen  that  the  total  ton- 
nage, entries  and  clearances,  in  the  foreign  trade  at  New 
York  was  11,055,236  tons,  and  that  the  foreign  trade  for  all 
the  seaports  of  the  United  States  taken  together  was  26,983,- 
313  tons.  The  freight  passing  from  L,ake  Huron  to  Lake 
Brie  was  estimated  at  about  20,000,000  tons  ;  that  is,  the 
freight  passing  Detroit  was  twice  the  foreign  trade  of  New 
York,  and  over  two-thirds  that  for  all  our  seaports  together. 

In  considering  these  facts  as  to  the  inland  navigation  of 
the  United  States,  it  ought  to  be  kept  in  mind  that,  with  the 
exception  of  the  lake  marine,  there  have  been,  for  several 
decades,  but  few  improvements  made  in  ways  of  navigating 
our  inland  waterways ;  whereas,  the  ocean  steamship  and 
the  railroad  have  advanced  rapidly  in  efficiency,  one  improve- 
ment following  close  on  another.  The  extension  of  the 
inland  waterways  of  the  United  States,  during  the  last  cen- 
tury, has  kept  pace  neither  with  the  development  of  mari- 
time navigation,  nor  with  the  progress  of  the  railroad. 
During  the  past  fifteen  j^ears,  we  have  been  pursuing  a 
liberal  policy  in  the  betterment  of  the  natural  water  routes, 
but  their  extension  and  connection  by  means  of  canals  have  / 
been  neglected.  Private  interests  have___comb.ine<l.,.with 
public  ignorance  and  apathy  to  prevent  that  dpw1.optnf>nt  of  !/ 
the  artificial  waterways  of  the  United  States  which  is 
warranted  by  the  magnitude  of  our  inland  commerce. 

There  has,  indeed,  been  strenuous  opposition  to  the  policy 
which  the  United  States  has  pursued  in  aiding  inland 


io  ANNALS  OF  THE  AMERICAN  ACADEMY. 

navigation.*  "  Probably  no  class  of  general  legislation," 
says  Senator  Frye,  in  the  report  of  the  Senate  Committee  on 
Commerce,  "has  been  subjected  to  more  severe  and  con- 
tinued criticism  than  that  enacted  for  the  support  and 
development  of  our  internal  and  seaboard  commerce  by 
affording  increased  and  safer  means  of  communication." 
This  opposition,  of  which  Senator  Frye  speaks,  has  pro- 
ceeded not  only  from  railroads,  but  also  from  the  demagogues 
of  the  press  and  stump,  whose  motives  are  seldom  above 
reproach.  There  have  been  those,  it  is  true,  who  in  honesty 
of  purpose  and  with  words  of  wisdom,  have  raised  a  voice  of 
warning  against  the  methods  which  Congress  has  employed 
in  its  river  and  harbor  legislation,  and  have  urged  Congress 
to  pursue  a  policy  not  less  liberal  but  more  scientific.  Such 
critics  are  deserving  of  gratitude  rather  than  censure. 

me  expenditure  of  money  for  the  construction  of  canals 
has  been  most  strenuously  opposed.  The  history  and 
present  condition  of  artificial  waterways,  and  a  misconcep- 
tion of  their  functions  as  agents  of  commerce,  as  it  is  carried 
on  to-day,  afford  an  explanation,  though  not  a  sufficient 
justification,  for  this  feeling  against  the  canal.  In  spite  of 
this  feeling,  however,  the  magnitude  and  recent  rapid 
increase  in  inland  navigation,  have  not  only  strengthened 
the  demand  for  the  further  improvement  of  natural  water- 
ways, but  have  also  shown  the  necessity  for  supplementing 
these  with  canals.  The  large  use  that  has  been  made  of  the 
ocean-ship  canals,  and  of  the  purely  inland  waterways  of 
France  and  Germany  and  New  York,  have  increased  this 
demand.  The  opposition  to  the  liberal  and  scientific  use  of 
public  money  in  the  interest  of  inland  routes  of  navigation 
will  grow  less  ;  for,  as  Senator  Frye  says,  ' '  a  more  intelligent 
and  clear  perception  of  the  results  of  such  expenditure  has 
been  manifesting  itself,  and  in  all  probability  within  the 
present  century,  as  our  inland  and  ocean  traffic  continues  to 

*  For  a  fuller  discussion  of  the  opposition  to  appropriations  for  the  aid  of  inland 
navigation  than  is  here  given,  consult  the  author's  paper  on  "  River  and  Harbor 
Bills,"  ANNALS  OF  THE  AMERICAN  ACADEMY,  Vol.,  II,  p.  782.  May,  1892. 


RENAISSANCE  OF  INLAND  NAVIGATION.  11 

develop  and  demonstrate  each  year  more  forcibly  the  wisdom. 
and  absolute  necessity  of  our  expenditures  for  rivers  and 
harbors,  the  undeserved  censure  will  have  entirely  ceased, 
and  the  only  question  to  receive  attention  will  be  that  of 
where  the  invariably  adequate  funds  can  be  expended  to  the 
best  advantage.  '  ' 

There  is  no  doubt  but  that  the  growing  favor  in  which 
the  direct  promotion  by  the  State  of  inland  navigation  is 
regarded  in  the  United  States,  France  and  Germany,  is  due 
in  no  small  degree  to  the  change  which  has  taken  place  in 
men's  conception  of  the  functions  of  the  State.  The  laissez 
faire,  laissez  passer  theory  is  abandoned,  and  the  direct 
intervention  of  the  State  in  the  affairs  of  trade  and  commerce 
for  the  purpose  of  adding  to  the  wealth  and  welfare  of  society 
is  to-day  approved  of  under  circumstances  where  it  would 
have  been  condemned  even  a  generation  ago.  Such  being 
the  attitude  of  men  toward  the  State,  attention  is  naturally 
turned  to  the  inland  waterways  to  see  what  is  their  commer- 
cial r61e,  and  to  decide  to  what  extent  the  State  ought  to 
participate  in  their  improvement  and  extension. 
_The  military  significance  of  inland  waterways  has  done 
nota  little  to  turn  attention  to  t^pm  arf|  f 


interest  in  their  construction.  The  growth  of  the  feeling  of 
nationalism  that  is  so  characteristic  of  the  present,  and  of 
which  the  development  of  the  military  in  every  European 
country  is  but  one  manifestation,  would  and  does  do  much 
to  incite  each  nation  to  do  all  it  can  to  improve  the  condition 
of  jts  trade  and  industry,  but  the  requirements  of  defence 
are  an  especially  strong  incentive  toState  aid  to  waterways. 
Prussia  ancPthe  Empire  are  constructing  the  Nord-QsJ:-See 
Cana!7  very  largely  for  the  military  purpose  of  securing- 
a  waterway  from"  the  Baltic  to  the  North  Sea  thrpugh 
German  territory.  Our  recent  trouble  with  Chili  did  much 
to  awaj^en  tlie  interest  of  the  United  States  government  in 
the  Nirfl.rfl.gfi  a  Capal.  and  the  feeling  that  the  waterway 
ought  to  be  controlled  by  the  United  States  and  by  no  other 
power  is  the  reason  that  will  ultimately  induce  the  United 


12  ANNANS  OF  THE  AMERICAN  ACADEMY. 


States  government  to  aid  or  undertake  the  work. 
ingfor  the  construction  by  the  United  States  of  a  lake  ship 
canal  from  the  Great  lyakes  to  tide  water  never  omit  to  score  the 
telling  point  that  such  a  waterway  would  be  necessary^  to 
the  defence  of  our  frontier  in  case  of  a  war  with  England. 

Evidences  of  the  renaissance  of  inland  navigation  are 
manifest  in  every  country.  In  England,  the  Manchester 
ocean-ship  canal"  is  nearing  completion,  and  other  similar 
works  of  scarcely  less  importance  are  being  discussed. 
France  has  been  steadily  enlarging  and  extending  her  inland 
waterways  since  1879,  and  the  much  mooted  project  of 
making  the  Seine  navigable  for  large  ocean  vessels  as  far  as 
Paris  seems  reasonably  sure  of  execution.  Austria  and 
Hungary  are  improving  the  Theiss  and  the  Danube,  and 
breaking  down  the  '  '  Iron  Gates  '  '  that  obstruct  the  com- 
merce to  and  from  the  lower  course  of  the  Danube.  Bavaria 
is  considering  the  improvement  of  the  Main  and  its  connec- 
tion with  the  Danube  by  a  larger  and  more  serviceable 
waterway  than  the  existing  canal.  Besides  aiding  in  the 
construction  of  the  Nord-Ost-See  Canal,  Prussia  is  putting 
through  a  canal  from  the  coal  mines  near  the  Rhine  at 
Dortmund  to  the  lower  course  of  the  Ems  River,  and  has 
authorized  the  construction  of  other  important  canals. 
Rome  and  Brussels  are  especially  interested  in  waterways, 
because  of  their  desire  to  bring  the  ocean  ships  to  their 
wharves. 

The  interest  of  the  United  States  in  the  promotion  of  inland 
navigation  is  indicated  by  the  numerous  waterways  conven- 
tions that  have  met  during  the  last  two  years,  and  by  the 
liberal  appropriations  which  several  successive  Congresses 
have  made.  Private  capital  has  begun  the  construction  of 
the  Nicaragua  Canal,  a  work  which  the  United  States  will 
doubtless  aid  if  not  entirely  assume.  A  corporation  is 
enlarging  the  Chesapeake  and  Delaware  Canal  into  a  water- 
way for  ocean  ships.  Congress  has  appropriated  large  sums 
to  continue  the  improvements  of  the  Mississippi,  Missouri, 
and  Columbia  rivers,  and  to  deepen  the  channels  of  the 


RENAISSANCE  OF  INLAND  NAVIGATION.  13 

Great  Lakes  to  twenty-one  feet,  and  to  begin  the  construction 
of  an  efficient  waterway  between  the  Great  Lakes  and 
the  Mississippi  River.  Pittsburg  is  casting  about  to  se£ 
whether  she  may  not  obtain  connection  with  Lake  Erie  by 
means  of  a  lake- ship  canal ;  and  the  Minnesota  Canal 
Company  has  recently  been  formed  at  St.  Paul  for  the 
purpose  of  connecting  St.  Paul  and  Minneapolis  by  means 
of  a  similar  waterway  with  Duluth  and  Lake  Superior. 

These  and  the  many  other  works  now  being  executed,  or 
about  to  be  begun,  warrant  the  use  of  the  expression — The 
renaissance  of  inland  navigation.  The  works  and  projects 
referred,  to  include  not  only  the  improvement  of  natural 
waterways,  but  also  the  construction  of  canals.  The  experi- 
ence of  the  ' '  Hepburn  ' '  investigating  committee  which  the 
New  York  Legislature  appointed  in  1879,  indicates  the 
important  place  inland  waterways,  including  the  canal,  have 
in  transportation  :  ' '  While  the  committee  made  no  attempt 
to  investigate  the  relations  of  the  railroads  to  the  canal, 
and  sought  to  lessen  their  labors  by  avoiding  this  question, 
the  canal,  like  Banquo's  ghost,  would  not  down ;  but  we 
were  compelled  to  meet  it  at  every  point  and  turn  of  the 
investigation." 


CHAPTER  II. 

CLASSIFICATION  OF    INLAND  WATERWAYS.      THF, 
WAY  THEY  SHOULD   BE  STUDIED. 

Inland  waterways  may  be  divided  according  to  the  pur- 
poses they  subserve,  into  three  classes :  First,  natural 
waterways,  of  which  there  are  two  kinds  :  (i)  Rivers  and 
lakes  whose  commerce  is  distinct  from  that  on  the  ocean 
in  the  sense  that  ocean  vessels  cannot  navigate  them,  and 
(2)  the  lower  courses  of  large  rivers  and  the  arms  of 
the  sea,  whose  waters  float  both  ocean  vessels  and  boats 
from  the  interior.  Second,  the  inland  canal,  the  purely 
artificial  waterway  whose  purpose  may  be  to  lengthen  a 
natural  water-course,  to  connect  separated  rivers,  lakes  or 
arms  of  the  sea,  or  to  establish  a  waterway  in  a  region 
where  no  water-course  exists.  Third,  the  ocean-ship 
canal,  of  which  also  there  are  two  kinds :  (i)  Those  such 
as  the  Suez  Canal  is,  and  as  the  Nicaragua  Canal  will  be 
when  completed,  that  shorten  the  routes  of  ocean  travel 
and  traffic.  They  are  similar  to  the  canal  connecting  two 
separated  inland  systems  of  navigation  except  that  their 
purpose  is  rather  to  promote  inland  commerce  indirectly, 
through  facilitating  carriage  on  the  ocean,  than  directly 
by  extending  the  routes  of  inland  navigation.  (2)  The  other 
class  of  ocean-ship  canals  are  such  as  the  Rotterdam,  Amster- 
dam and  Manchester  canals,  whose  purpose  it  is  to  float  ocean 
ships  to  the  docks  of  cities  that  have  previously  been  inland. 

The  maritime  and  lake-ship  canal  differ  essentially  from 
other  artificial  waterways.  Their  object  is  not  only  the 
transportation  of  goods  a  distance  equal  to  their  length,  but 
also,  in  order  that  reloading  may  be  avoided,  to  bear  the 
ships  containing  the  goods,  either  from  one  ocean,  or  large 
lake,  to  another  or  to  some  city  that  is  a  great  manufactur- 
ing or  distributing  centre.  The  service  they  perform  is  a 
definite  one  ;t  and  one,  too,  that,  as  compared  with  the 

(14) 


CLASSIFICATION  OP  INLAND  WATERWAYS.  15 

railroads,  may  be  estimated  in  advance- of  construction  with 
nearly  as  large  a  degree  of  accuracy  ^because  of  the  fact  that 
the  railway  can  compete  with  such  a^canal  in  only  a  limited 
way  and  at  a  disadvantage^  The  probability  that  capital  in- 
vested in  such  an  enterprise  will  or  will  not  yield  a  profit  may 
be  tolerably  easily  calculated.  Maybe,  the  preliminary  esti- 
mates of  cost  of  the  Manchester  Canal  fell  far  short  of  the 
actual  expense  of  the  work,  while  the  experience  of  the 
Panama  Company  shows  that  over-credulous  capitalists 
may  be  made  the  dupes  of  speculators  and  rogues  in  the 
case  of  waterway  improvements,  the  same  as  in  other 
enterprises.  The  failure  of  the  Panama  scheme  was  so 
obviously  due  to  the  fact  that  the  undertaking  became  the 
gambling  project  of  designing  men  that  the  future  invest- 
ment of  capital  in  ocean-ship  canals  will  not  thereby  be  at 
all  deterred.  Economists  and  statesmen  have  united  in 
advocating  the  construction  of  ocean-ship  waterways  since 
the  Suez  Canal  gave  such  an  impetus  to  commerce.  The 
good  returns  yielded  on  capital  invested  have  induced 
capitalists  to  undertake  other  similar  works.  ^The_Man- 
chester  Canal  is  well  on  its  way  toward  completion.  The 
Nicaragua  Canal  has  been  begun  and  the  success  of  the 
Suez  Canal  makes  men  well-nigh  certain  that  these  canals 
will  be  good  investments  of  capital.  The  question,  then, 
to  be  considered  in  connection  with  them  is  quite  as  much 
low  and  by  whom  they  should  be  constructed  as  whether 
or  not  the  works  ought  to  be  executed. 

Of  all  countries  in  the  world,  the  United  States,  because 
of  its  present  and  prospective  commerce,  has  the  most  to 
hope  for  from  maritime  and  lake-ship  canals.  We  need 
in  this  country  to  study  the  actual  commercial  conditions, 
and  in  what  way  they  can  be  bettered  by  these  canals, 
and  especially  by  the  one  at  Nicaragua.  The  United  States 
seems  to  stand  before  this  project  hesitating  to  enter  upon 
it,  much  as  the  children  of  Israel  stood  at  the  entrance  to 
the  promised  land  and  would  not  enter  in.  We,  too,  ne 
some  Joshua  for  a  leader. 


1 6  ANNALS  OE  THE  AMERICAN  ACADEMY. 

Many  who  concede  the  importance  of  maritime  and  lake- 
ship  canals  doubt  whether  the  improvement  of  natural  inland 
waterways  and  the  construction  of  canals  are  works  on  which 
it  is  advisable,  under  present  conditions,  to  expend  capital. 
This  phase  of  the  question  may,  then,  rightly  be  investi- 
gated at  greater  length.  /These  two  classes  of  undertakings, 
river  improvements  and  canal  construction,  will  not,  nor 
should  not  as  is  done  by  some,  be  classified  and  discussed 
together.  \  Because  the  improvement  of  important  streams 
such  as  tne  Rhine  and  the  Mississippi  may,  by  reason  of  the 
commercial  importance  these  rivers  enjoy,  be  wise  economy, 
it  does  not  follow /necessarily  that  canal  building  is  worthy 
of  promotion.  Canals  must  be  studied  independently  of 
rivers  and  be  separately  compared  with  railroads?  That 
some  one,  the  State  or  corporations,  ought  to  improve  the 
large  lakes  and  more  important  rivers  as  commercial  routes 
is  granted  by  all.  The  relation  that  the  government  ought 
to  bear  to  such  works  deserves  further  analysis  than  has  yet 
been  given  the  subject.  The  commercial  importance  of 
streams  of  secondary  rank  needs  study  in  order  to  reveal 
what  their  real  place  is  and  ought  to  be  in  the  transporta- 
tion systems  of  the  present  time.  As  a  result  of  the  prelim- 
inary surveys  of  water-courses,  which  Congress  in  each  river 
and  harbor  bill  directs  the  United  States  Engineers  to  make, 
we  have,  in  the  ' '  Annual  Report  of  the  Chief  of  Engineers, ' ' 
a  large  amount  of  material  regarding  the  condition  of  the 
various  water-courses  of  the  United  States  and  some  infor- 
mation as  to  their  commerce.*  The  statistics  of  the  inland 
navigation  of  the  United  States  are,  however,  still  very 
incomplete.  The  eleventh  census  is  the  first  one  that  has 
undertaken  to  gather,  compile  and  publish  full  statistics 
concerning  all  classes  of  transportation  by  water,  and,  with 
the  exception  of  the  Great  Lakes,  Lake  Champlain  and 
the  rivers  of  the  Mississippi  Valley,  this  has  given  us  no 

*  In  1890,  Major  H.  M.  Adams,  of  the  United  States  Engineer  Corps,  prepared, 
in  the  office  of  the  Chief  of  Engineers,  an  outline  map  of  the  United  States,  show- 
ing the  tonnage  of  the  rivers  and  harbors  of  the  United  States.  This  work  has 
not  been  repeated  since. 


CLASSIFICATION  OF  INLAND  WATERWAYS.          17 

statistics  of  inland  navigation  as  distinct  from  the  coast- wise 
traffic.  There  ought  to  be  legislation  enacted  by  Congress 
providing  for  the  collection,  classification,  and  compilation 
of  full  and  reliable  statistics  of  the  inland  commerce  of  tlie~ 
United  States.  Perhaps  we  shall  secure  this  when  Congress 
establishes  a  permanent  bureau  of  statistics.  The  United 
States  Engineers  have  given  us  data  enough  to  show  that 
streams  of  secondary  importance  have  a  place  in  our  trans- 
portation system  ;  we  need,  however,  to  classify  these  statis- 
tics and  to  investigate  in  a  broader  and  more  comparative 
manner  the  commercial  industrial  and  economic  effects  of 
these  streams  and  to  inquire  how  and  by  whom  the  expenses 
of  carrying  this  on  are  to  be  met. 

To  ascertain  the  position  the  canal  occupies  in  the  com- 
mercial and  industrial  world  is  not  easy.  If  "  specialists, 
even,  have  the  greatest  difficulty  in  holding  that  tight  rein 
on  their  thought  without  which  it  is  impossible  to  arrive  at 
an  independent  judgment,"  we  can  hope  to  get  at  a  true 
solution  of  the  problem  before  us  only  by  a  careful  historical 
and  statistical  study.  The  present  condition  of  the  canal, 
and  the  progress  which  engineering  science  is  now  making 
in  rendering  the  canal  a  more  efficient  agent,  need  to  be  given 
a  careful  consideration  in  the  investigation  which  this  mono- 
graph proposes  to  make. 

To  state  the  problem  broadly,  it  is  necessary,  in  order  to 
answer  the  question — What  is  the  present  and  what  may  be 
the  future  importance  of  inland  waterways  ?— to  find  out  their 
present  condition,  and  how  much  freight  is  carried  on  them 
and  on  the  railroads,  to  ask  what  influence  inland  waterways 
exert  on  railroad  tariffs  and  revenues,  to  inquire  especially 
under  what  condition  and  to  what  extent  canals  can  compete 
with  railroads  in  the  future.  To  make  this  discussion  com- 
plete it  is  necessary  to  decide  to  what  extent  the  State  should 
construct  canals  and  improve  inland  waterways,  and  how 
far  the  State  ought  to  leave  this  work  to  corporations,  and 
to  treat  the  question  of  tolls  on  State  waterways.  Having 
done  this,  the  peculiar  needs  of  the  United  States  and  what. 


1 8  ANNAI.S  OF  THE  AMERICAN  ACADEMY. 

is  being  done  to  meet  them  may  be  profitably  studied.  To 
accomplish  all  this  is  admittedly  a  task  at  once  difficult  and 
important. 

The  question  whether  inland  waterways  shall  be  im- 
proved cannot  be  answered  alike  for  all  countries.  In 
these  States  where  both  railroads  and  waterways  are  owned 
and  controlled  by  the  government,  the  problem  is  simpler. 
Waterways  will  be  found  to  have  an  important  influence 
on  railroad  charges  even  under  these  circumstances ;  but 
the  waterways  are  to  be  regarded  less  as  competitors  and 
more  as  complements  of  the  railroads.  The  problem  in 
such  countries  is  to  discover  how  the  two  carriers  may  best 
be  made  to  co-operate  as  parts  of  a  single  unified  system  of 
transportation.  In  countries  such  as  the  United  States, 
France  and  England,  where  the  railroads  are  private 
property  under  private  control,  the  influence  of  navigation 
on  railroad  tariffs  calls  for  more  detailed  study.  In  this 
case  waterways  must  regulate  railroad  rates  chiefly  by 
competition,  and  how  to  maintain  the  navigable  ways  as 
independent  competing  routes  becomes  a  vital  question. 
It  should  still  be  the  purpose  of  the  State  to  form  of  the 
two  carriers  a  single  system  of  transportation,  the  difference 
between  the  relation  of  waterways — private  or  State — to 
State  railways  and  to  private  railways  being  that  in  the 
latter  case  the  two  parts  of  the  system  should  compete 
with  each  other,  while  in  the  former  instance  this  is  not 
necessary. 

Most  of  all  it  is  essential  in  considering  the  relative 
merits  of  railroads  and  improved  waterways  that  one's 
mind  be  kept  free  from  prejudices.  The  question  of  improv- 
ing waterways  and  constructing  canals  affects  favorably  and 
unfavorably  large  money  interests.  Business  men  often  argue 
on  the  basis  of  their  own  individual  advantage.  Engineers 
sometimes  approach  the  question  more  regardful  of  their 
present  and  future  reputation  than  of  the  real  merits  of 
the  discussion.  Legislators,  especially  under  our  system  of 
making  improvements,  are  frequently  too  strongly  influenced 


CLASSIFICATION  OF  INLAND  WATERWAYS.  19 

by  personal  and  local  interests,  and  do  not  give  due  weight 
to  national  considerations.  The  investigator  of  an  economic 
problem  such  as  this  should  not  approach  the  question  as  ~an- 
advocate  of  the  waterway,  nor  as  a  friend  of  the  railway,  but 
as  a  seeker  after  truth.  His  attitude  should  be  one  of 
unbiased  inquiry. 


CHAPTER  III. 

THE    PRESENT    CONDITION    OF    ENGLISH     AND     AMERICAN 
INLAND  WATERWAYS. 

The  policy  of  the  federal  government  toward  the  improve- 
ment of  rivers  and  harbors  during  the  past  fifteen  years  has 
been  liberal.  The  deepening  of  harbors  has  been  generously 
cared  for,  and  the  Great  Lakes  and  the  Mississippi  River 
have  been  treated  in  a  like  manner  ;  but  the  construction  of 
canals  to  connect  the  more  important  systems  of  waterways 
with  each  other  and  to  the  ocean  has  not  been  so  vigorously 
pushed.  Indeed,  the  construction  of  canals  in  the  United 
States,  either  by  the  States  or  by  the  Federal  Government 
has  stood  practically  at  a  standstill  for  a  generation.  Those 
waterways  that  were  once  the  pride  of  the  States,  have 
either  been  abandoned  by  their  owners,  or  allowed  to  fall 
into  a  condition  of  little  usefulness. 

The  present  condition  of  inland  waterways  is  easily 
accounted  for.  The  r61e  that  the  canal  is  to-day  called  on 
to  play  in  commerce,  differs  from  its  r61e  of  sixty  years  ago. 
Most  canals  existing  at  present  were  constructed  at  a  time 
when  industrial  needs  existed  that  have  since  greatly 
changed  or  passed  away.  They  were  constructed  when  the 
volume  of  freight  seeking  movement  was  comparatively 
small,  and  when  through,  as  contrasted  with  local,  freights 
was  relatively  unimportant.  The  localization  and  centrali- 
zation of  industries,  and  the  concentration  of  population  into 
great  manufacturing  centres  had  but  begun.  Industry  did 
not  then  as  now  call  for  the  movement  of  great  quantities  of 
bulky  raw  materials  long  distances,  but  rather  for  the  car- 
riage of  small  quantities  to  less  remote  points.  The  canals 
of  Kngland  and  the  continent  generally  were  built  accord- 
ingly. Numerous  corporations  constructed  small  waterways 
with  dimensions  sufficient  only  to  meet  the  needs  of  the 

(20) 


ENGLISH  AND  AMERICAN  WATERWAYS.  21 

time.  Very  little  regard  was  paid  by  one  canal  company  to 
the  dimensions  of  waterways  other  than  their  own.  In  the 
United  States,  most  canals  were  longer  and  looked  to  the^ 
movement  of  traffic  greater  distances,  but  they  were  small 
and  calculated  only  for  the  movement  of  small  volumes  of 
freight. 

The  railroad  also  entered  the  transportation  field  when 
traffic  was  largely  local  in  character  and  still  small  in 
amount.  The  first  railroads  were  short  local  lines.  They 
began  competing  with  the  waterway  for  a  traffic  which  they 
soon  showed  themselves  better  able  to  handle  ;  for  the  rail- 
road is  an  agent  better  adapted  than  the  waterway  to  the 
transportation  of  small  quantities  of  goods  a  short  distance. 
The  railroad  conquered  in  the  early  contest  with  the  canal 
and  the  improved  river,  and  what  is  more,  during  this  con- 
test an  important  industrial  change  was  going  on  in  society. 
This  alteration  in  industrial  conditions  was  partly  due  to  the 
influence  of  the  railroad,  partly  caused  by  other  inventions, 
and  not  a  little  accelerated  by  the  awakened  intellectual 
activity,  and  the  increase  in  the  scale  of  human  wants  that 
have  accompanied  the  change.  This  transformation  has 
put  quite  a  new  phase  on  the  commercial  needs  of  society. 
There  has  been  a  great  revolution  in  transportation.  Passes 
ger  traffic  has  reached  such  immense  proportions  that  those 
of  fifty  years  ago  seem  insignificant.  Freight  has  not  only 
enormously  increased,  but  has  radically  changed  in  char- 
acter, a  fact  of  which  the  great  trunk  lines  of  the  United 
States  are  a  striking  example.  The  railroad  has  made 
possible  the  rapid  growth  of  large  cities,  and  the  concentra- 
tion of  manufacturing  into  great  centres.  The  food  supply 
of  the  cities  of  the  eastern  part  of  the  United  States  and  of 
those  of  England  even  is  drawn  from  the  grain  fields  of  the 
Mississippi  Valley.  In  determining  what  is  the  function  of 
inland  waterways  in  commerce,  these  facts  must  be  kept  in 
mind. 

To  enter  at  length  into  the  history  of  the  struggle  of  the 
railway  and  waterway  that  brought  about  the  present 


22  ANNALS  OF  THE  AMERICAN  ACADEMY. 

condition  of  the  canal  would  take  this  discussion  too  far  afield.* 
But  while  we  are  especially  concerned  with  present  conditions 
we  may  with  profit  refer  to  the  past  when  such  references 
help  explain  present  conditions  and  aid  us  in  deciding  what 
policy  ought  to  be  adopted  in  the  future.  The  purpose 
being  rather  to  accomplish  this  than  to  cover  the  history  of 
the  relation  of  the  railway  and  waterway  in  a  complete  man- 
ner, it  will  be  sufficient  to  bring  out  the  salient  facts  of  the 
struggle  in  England  and  in  America.  England  being  the 
jOnly  country  where  the  waterways  and  railroads  were  and  are 
both  private  property,  her  experience  is  especially  instructive. 
The  contest  between  the  waterways  and  railroads  of  Eng- 
land was  very  bitter.  When  the  railroad  strove  to  enter  the 
field  there  was  great  opposition  on  the  part  of  the  canal 
companies.  They  were  sole  possessors  of  commerce.  There 
was  very  little  competition  among  canal  companies,  they 
held  monopolies  and  charged  excessively  high  tariffs,  f  The 
first  railroad  charter  of  importance  was  granted  in  1826  for 
a  line  between  Manchester  and  Liverpool.  The  two  canals 
connecting  these  places  had  pooled  and  raised  their  charges 
exorbitantly  high.  They  opposed  the  request  of  the  rail- 
road company  for  a  charter  so  strongly  that  it  cost  Huskisson 
$350,000  to  get  the  act  through  Parliament.  The  Man- 
chester and  Liverpool  railroad  was  a  great  success  and  rail- 
road building  progressed  rapidly.  The  contest  with  the 
waterways  raged  inside  and  outside  of  Parliament,  and  the 
canals  were  not  long  in  losing  their  overpowering  strength. 
As  pointed  out  above,  the  railroads  were  a  better  commercial 

*  For  a  full  account  of  the  struggle  in  England,  see  Cohn's  "Englische  Eisen- 
bahnpohtik."  An  account  for  France  and  England  is  briefly  given  in  Hadley's 
'  Railway  Transportation."  The  text  of  all  the  important  English  laws  for  the 
regulation  of  railways  is  given  in  the  "  Second  Annual  Report  of  the  Interstate 
Commerce  Commission." 

t  Cf  a  speech  by  Morrison  in  the  House  of  Commons,  May  17,  1836 :  "  The 
history  of  existing  canals,  waterways,  etc.,  affords  abundant  evidence  of  the  evils 
to  which  I  have  been  adverting.  An  original  share  in  the  I<oughborough  Canal, 
for  example,  which  cost  142^"  173.  is  now  selling  at  about  1250^"  and  yields  a  divi- 
dend of  yo£  or  loo/"  a  year  !  The  fourth  part  of  a  Trent  and  Mersey  Canal  share 
or  y>jC  of  the  company's  stock,  is  now  fetching  600^",  and  yields  a  dividend  of  about 
30^"  a  year.  And  there  are  various  other  canals  in  nearly  the  same  situation." 
Hansard's  Debates,  3d.  Series,  Vol.  xxxiii.,  p.  981. 


ENGLISH  AND  AMERICAN  WATERWAYS.  23 

agent  for  the  carriage  of  most  kinds  of  freight  then  seeking 
transportation,  and  though  built  chiefly  like  canals  to  carry 
on  a  local  traffic,  they  quickly  and  easily  adapted  themselves, 
to  the  transportation  of  through  freight.  They  kept  pace 
with  the  revolution  in  industry  and  commerce,  because  they 
readily  admitted  of  extension,  unification,  and  consolidation. 
Not  so  the  canals  of  England,  whose  dissimilarity  of  dimen- 
sions made  combination  difficult,  and  prevented  competition 
to  any  great  extent  with  the  railroads  for  long-distance 
traffic.  They  did  not  keep  abreast  of  the  progress  of  events. 
The  owners  of  the  canals  were,  of  course,  largely  to  blame ; 
for  they  did  not  understand  that  with  the  advent  of  the 
railroad  the  function  of  the  canal  changed,  nor  did  they 
push  forward  the  improvements  in  waterways  that  were 
necessary  to  adapt  them  to  the  altered  industrial  and  com- 
mercial interests.  Vested  interests  are  by  nature  always 
conservative. 

The  railroads  were  alert  and  several  circumstances  were 
favorable  to  them.  Most  of  the  industrial  cities  had  grown 
up  along  the  lines  of  the  canals,  and  thus  it  was  that  many 
railroads  paralleled  the  canals  and  came  into  competition  with 
them.  No  attempt  was  made  by  either  party,  as  has  since 
been  done,  to  share  freights  in  order  that  each  might  take 
the  part  it  was  by  nature  best  fitted  to  transport,  but  various 
methods  were  adopted  by  the  railroads  to  injure  the  efficiency 
of  their  rivals.  The  canal  lines,  as  has  been  said,  were 
composed  of  several  parts,  each  section  being  in  the  owner- 
ship of  an  independent  company.  The  railroad  company 
had  only  to  buy  a  short  section,  if  it  were  an  important  one, 
to  get  possession  of  a  whole  line.  This  it  did,  and  the  canals 
or  sections  so  purchased  were  frequently  repaired  in  the 
busy  season,  and  were  often  closed  for  traffic  during  the 
night.  When  the  waterway  was  parallel  to  the  railroad, 
rates  on  the  latter  were  made  lower.  Furthermore,  it  was 
of  advantage  to  the  railways  that  canal  companies  were  not 
allowed,  till  1845,  to  be  shippers,  and  that  canal  freight  rates 
were  fixed  by  the  government.  The  railroads  had  neither 


24  ANNANS  OF  THE  AMERICAN  ACADEMY. 

of  these  governmental  restrictions.  Some  canals  and  rail- 
roads ended  competition  by  uniting  in  trusts.  Other  owners 
of  waterways  strove,  but  unsuccessfully,  to  form  independ- 
ent trusts ;  thus  canal  property  declined  rapidly  and  its 
absorption  by  the  railroads  continued. 

By  these  means  the  railroads  were  able  the  more  quickly 
and  more  fully  to  cripple  the  waterways.  These  circum- 
stances, however,  only  hastened  a  result  that  must  surely 
have  ultimately  followed.  The  canals  of  England  were 
doomed  to  defeat  from  the  moment  of  their  entry  into 
competition  with  the  railroads  in  the  general  field  of  trans- 
portation ;  and  for  several  reasons :  The  railway  lines, 
at  least  after  the  first  few  years,  were  much  longer  than  the 
competing  waterways  ;  thus  the  canal  companies  with  small 
quantities  of  capital  had  to  compete  with  the  larger  amounts 
of  capital  owned  or  controlled  by  the  railroad  corporations. 
Again,  the  canals  could  carry  only  freight,  while  the  rail- 
roads conveyed  passengers  as  well.  The  policy  of  the 
railroads,  very  naturally,  was  to  keep  passenger  rates  high 
and  to  cut  on  freight  charges  till  competition  on  the  part 
of  the  canals  became  impossible.  Of  course  the  railroads 
were  not  obliged  to  cut  on  all  freight.  All  fast  freight 
came  to  them  in  any  case,  and  it  was  only  on  slow,  bulky 
goods  that  they  needed  to  lower  rates  to  embarrass  the 
canals.  The  last  two  of  these  reasons  are  as  valid  to-day  as 
they  were  then  and  are  quite  sufficient  to  demonstrate  the 
fact  that  the  field  of  the  waterway  in  transportation  is  a 
narrower  one  than  that  of  the  railway.  What  that  field  is  and 
what  its  importance  is  will  be  the  subjects  of  later  inquiry. 

The  legislation  of  Parliament  has  done  but  little  in  aiding 
the  development  of  canals  and  their  maintenance  as  compet- 
ing waterways.  The  numerous  petitions  from  railway 
companies  for  charters  kept  the  relation  of  the  State  to 
railroads  and  canals,  and  the  relation  of  the  two  means  of 
transportation  to  each  other  constantly  before  Parliament 
during  the  early  decades  of  railroad  building.  The  neces- 
sity for  governmental  control  of  railroad  charges  was  not  at 


ENGUSH  AND  AMERICAN  WATERWAYS.  25 

first  realized.  It  was  thought  that  canals  and  railroads 
would  compete  and  keep  down  charges,  and  it  was  also 
generally  supposed  that  on  railroads  the  same  as  on  turnpikes 
shippers  would  compete  with  each  other.  The  Select  Com- 
mittee of  the  House  of  Commons  that  reported  in  1839 
was  the  first  to  recognize  the  fact  that  the  owners  or 
operators  of  a  railroad  must  necessarily  control  the  shipment 
of  goods,  and  that  it  was  impracticable  for  individual  ship- 
pers to  own  and  run  cars  and  engines  in  the  way  they  had 
used  their  own  boats  and  wagons  on  canals  and  turnpikes. 
The  following  year  the  Select  Committee  of  the  House  of 
Commons  declared  itself  to  be  "  aware  that  instances  are 
not  wanting  where  companies  and  large  capitalists,  instead 
of  competing,  have  combined  and  entered  into  agreements 
whereby  the  public  have  suffered, ' '  but  still  it  did  not 
consider  it  had  material  enough  to  judge  itself  able  to 
establish  a  schedule  of  maximum  rates.  It  thought  the 
canals  might  be  looked  to  to  control  rates  on  heavy  articles, 
but  could  not  deny  that  the  tendency  of  canals  also  would 
be  to  combine  with  the  railroads  rather  than  to  compete 
against  them. 

The  power  of  the  railroads  rapidly  grew  strong  in  Parlia- 
ment. A  resolution  introduced  into  the  House  of  Commons, 
by  Mr.  Morrison,  1836,  for  the  governmental  revision  of 
rates  each  twenty  years,  met  at  first  with  approval  in  Par- 
liament, but  soon  encountered  such  an  opposition  from 
railroad  interests  as  to  defeat  it.  In  1844,  Mr.  Gladstone, 
at  that  time  president  of  the  Board  of  Trade,  said,  ' '  The 
railway  interest  is,  perhaps,  the  strongest  in  regard  to  direct 
influence  on  votes  of  members."*  The  bill  which  passed  in 
1844,  stipulating  that  railroads  constructed  in  the  future 
might  be  purchased  by  Parliament  after  they  had  been 
operated  twenty-one  years  without  interference,  and  had 
yielded  a  profit  annually  of  ten  per  cent  for  three  years  pre- 
vious to  purchase,  had,  of  course,  placed  no  real  control  over 

*  Speech  in  Parliament,  July  8,  1844.  Hansard's  Parliamentary  Debates,  third 
series,  Vol.  Ixxvi.,  p.  493. 


26  ANNAI£  OP  THE  AMERICAN  ACADEMY. 

the  actions  of  railroad  companies.  In  1845,  tne  canal  com- 
panies petitioned  Parliament  for  protection  against  the 
competition  of  the  railroads,  and  secured,  for  the  first  time, 
the  right  of  becoming  shippers  over  their  own  canals,  and 
obtained  the  power  to  raise  and  lower  their  tariffs.  The 
canal  companies  were  now,  for  the  first  time,  on  equal  legal 
footing  with  the  railroads.* 

Reasons  have  been  given  that  explain  why  simple  legal 
equality  of  the  canal  and  railway  companies  was  insufficient 
guarantee  that  canals  would  or  could  maintain  themselves 
as  independent  agents  of  commerce.  Railways  continued  to 
combine  with  each  other  and  to  get  the  canals,  either  by 
purchase  or  consolidation,  more  and  more  under  control. 
Parliament  investigated  the  matter,  and  in  1847  established 
a  well-nigh  powerless  Railway  Commission,  which  existed 
till  1851,  without  accomplishing  anything.  In  1852,  the 
House  appointed  a  select  committee  ' '  to  consider  the  prin- 
ciple of  amalgamation  as  applied  to  railway,  or  railway  and 
canal  bills,  and  to  consider  the  principles  which  ought  to 
guide  the  House  in  railway  legislation."  The  committee 
found  that  in  several  important  districts  the  canals  and  rail- 
roads had  united  ;  that  the  absorption  of  canal  property  by 
the  railroads  had  not  been  checked,  and  that  the  parlia- 
mentary regulation  to  secure  freedom  of  traffic  on  the  canals 
had  been  ineffectual,  f  The  result  of  the  investigation  was 
the  '  'Act  for  the  Better  Regulation  of  the  Traffic  on  Railways 
and  Canals,"  1854;  Section  2  of  which  enunciated  several 
provisions  that  have  appeared  in  most  subsequent  English 
and  American  laws  for  the  control  of  railroads.  It  may, 
indeed,  be  said  that  it  has  been  the  ideal  of  railroad  legisla- 
tion since  1854  to  giye  validity  to  the  provisions  of  this 
section.  It  provides :  ' '  Every  railway  company,  canal 

*"  Only  ten  of  the  sixty  or  seventy  canal  navigation  proprietors  (1892)  in  the 
United  Kingdom  act  as  carriers."  Edwin  Clements,  in  article  on  "Taxes  and 
Tolls  of  the  United  Kingdom."  Report  to  Fourth  International  Congress  on 
Inland  Navigation. 

t  Reference  is  here  made  to  only  such  part  of  the  committee's  report  as  concerns 
the  discussion  in  hand. 


ENGUSH  AND  AMKRICAN  WATERWAYS.  27 

company,  and  railway  and  canal  company  shall,  according 
to  their  respective  powers,  afford  all  reasonable  facilities  for 
the  receiving  and  forwarding  and  delivering  of  traffic  .upon 
and  from  the  several  railways  and  canals  belonging  to  or 
worked  by  such  companies  respectively,  and  for  the  return  of 
carriages,  trucks,  boats  and  other  vehicles,  and  no  such  com- 
pany shall  make  or  give  any  undue  or  unreasonable  preference 
or  advantage  to,  or  in  favor  of,  any  particular  person  or  com- 
pany, or  any  particular  description  of  traffic,  in  any  respect 
whatsoever;  nor  shall  any  such  company  subject  any  particu- 
lar person  or  company,  or  any  particular  description  of  traffic, 
to  any  undue  or  unreasonable  prejudice  or  disadvantage  in 
any  respect  whatsoever ;  and  every  railway  company,  and 
canal  company,  and  railway  and  canal  company  having  or 
working  railways  or  canals,  which  form  a  continuous  line  of 
railway  or  canal  or  railway  and  canal  communication,  or 
which  have  the  terminus,  station,  or  wharf  of  the  one  near 
the  terminus,  station  or  wharf  of  the  other,  shall  afford  all 
due  or  reasonable  facilities  for  receiving  and  forwarding  all 
the  traffic  arriving  by  one  of  such  railways  or  canals  by  the 
other,  without  any  unreasonable  delay,  and  without  any 
such  preference  or  advantage,  or  prejudice  or  disadvantage 
as  aforesaid,  and  so  that  no  obstruction  may  be  offered  to 
the  public  desirous  of  using  railways  or  canals,  or  railways 
and  canals  as  a  continuous  line  of  communication,  and  so 
that  all  reasonable  accommodation  may,  by  means  of  the 
railways  and  canals  of  the  several  companies,  be  at  all  times 
afforded  to  the  public  in  that  behalf."  The  law  also  pro- 
vided that  complaints  of  aggrieved  parties  were  to  be  brought 
in  the  Court  of  Common  Pleas,  and  this  was  quite  sufficient  to 
make  the  law  without  effect.  In  twenty  years  only  two  suits 
were  brought  to  enforce  the  stipulation  in  regard  to  the  ship- 
ment of  goods,  and  both  cases  were  lost.  The  rulings  of  the 
courts  as  to  the  meaning  of  undue  preference  and  unreasonable 
rates  were  so  liberal  as  to  deprive  the  law  of  nearly  all  force. 
The  relation  of  the  waterways  and  canals  of  Kngland  has 
not  materially  changed  since  1854.  In  1872  the  means  of 


28  ANNALS  OF  THE  AMERICAN  ACADEMY. 

communication  were  again  investigated  at  length  by  another 
Select  Committee  of  the  House  of  Commons.  The  report 
made  was  only  negative  in  character  as  regards  the  policy 
to  be  pursued  in  legislating  on  inland  waterways.  The 
committee  reported  that  when  Parliament  had  permitted 
canals  to  unite  with  railroads  the  conditions  which  she  had 
imposed  to  secure  the  maintenance  of  the  canals  in  a  navi- 
gable condition  had  been  easily  avoided.  If  Parliament  were 
to  prohibit  the  canal  companies  from  selling  out  to,  or  uniting 
with,  the  railroads,  the  competition  of  the  railroads  would 
bankrupt  the  canal  companies.  Again,  if  a  canal  company 
came  to  Parliament  asking  permission  to  sell  out  in  order  to 
avoid  bankruptcy  what  was  to  be  done  except  to  grant  the 
request  ?  The  committee  thought  nothing  short  of  State 
purchase  of  canals  would  be  able  to  preserve  them  as  com- 
petitors of  the  railroads,  and  such  a  policy  the  committee 
did  not  feel  warranted  in  recommending. 

The  bill  of  1873,  "  An  Act  to  Make  Better  Provision  for 
Carrying  into  Effect  The  Railway  and  Canal  Traffic  Act,  1854, 
and  for  other  purposes  connected  therewith,"  resulted  from 
this  investigation.  It  established  a  Railway  Commission 
consisting  of  three  members  and  two  assistants,  in  whose 
hands  was  placed  the  enforcement  of  the  law  of  1854.  The 
law  stipulated  (Section  14)  that  "Every  railway  company 
and  canal  company  shall  keep  at  each  of  their  stations  and 
wharves  a  book  or  books  showing  every  rate  for  the  time  being 
charged  for  the  carriage  of  traffic  other  than  passengers  and 
their  luggage  from  that  station  or  wharf  to  any  place  to  which 
they  book,  including  any  rate  charged  under  any  special 
contract,  and  stating  the  distance  from  that  station  or  wharf 
of  every  station,  wharf,  siding,  or  place  to  which  any  such 
rate  is  charged."  The  commissioners  were  empowered  to 
decide  whether  terminal  charges  were  reasonable.  No  rail- 
road company  was  permitted  except  by  statutory  permission 
from  Parliament  to  purchase  or  to  obtain  control  of  a  canal 
without  consent  of  the  commissioners.*  Thus  the  law 

*  The  law  was  to  be  in  effect  only  five  years,  but  in  1878  it  was  continued  till 
the  end  of  1879,  then  till  December  31,  1882,  then  for  three  years  longer,  when  the 
commissioners  were  made  a  permanent  body. 


ENGLISH  AND  AMERICAN  WATERWAYS.  29 

strengthened  the  degree  of  the  State's  supervision  and  was  a 
step  in  the  right  direction.  The  commissioners  did  not 
secure  low  rates  for  shippers,  the  law  did  not  by  any  means 
cure  the  evils  of  unequal  and  excessive  charges  by  the  rail- 
roads ;  but  the  commissioners  did  constitute  a  court  before 
which  many  railroads  guilty  of  unjust  and  unequal  charges 
were  brought  and  made  to  change  their  tariffs.  The  law  did 
not  bring  about  a  revival  of  inland  commerce,  and  the  fore- 
going discussion  has  given  reasons  amply  sufficient  to  show 
the  impossibility  of  that  taking  place  on  the  canals  as  con- 
structed seventy  and  a  hundred  years  ago.  Though  from 
1873  to  1882  the  commissioners'  power  of  compelling  a  rail- 
road owning  canals  to  maintain  its  waterway  in  a  navigable 
condition  was  exercised  only  once,  still  the  position  of  the 
canals  as  compared  with  the  railroad  was  a  more  favorable 
one.  They  did  not  prosper  very  much,  but  they  held  their 
own. 

The  revival  of  interest  in  inland  navigation  has  been  espe- 
cially marked  since  1880,  and  this  was  very  largely  the 
cause  of  an  attempt  by  Parliament  in  1888,  to  pass  such  a 
law  as  would  surely  enable  the  waterways  of  England  to 
develop  and  enter  more  fully  into  competition  with  the  rail- 
roads. The  condition  of  inland  navigation  in  England  is  at 
present  not  entirely  discouraging.  The  canals  have  not 
been  entirely  driven  to  the  wall.  The  map  of  England 
shows  a  complicated  network  of  canals  and  canalized  rivers 
whose  length  is  3813  miles.  Of  canal  companies  proper, 
there  are  in  England  thirty-nine,  in  Scotland  none,  and  in 
Ireland  five.  Of  public  trusts  which  control  canals  or  canal- 
ized rivers  as  municipal  or  county  conservancy  boards, 
commissions,  or  trusts  there  are  thirteen  in  England,  two  in 
Scotland,  and  five  in  Ireland.  Three  city  corporations  of 
England  are  proprietors  of  navigations,  and  five  canals  of 
England  are  owned  by  private  individuals.  The  number 
of  railway  companies  owning  canals  in  England  are  fifteen, 
in  Scotland  two,  and  in  Ireland  one,  and  they  own  or  control 
no  less  than  1375  of  the  total  3813  miles  of  the  waterways  of 


30  ANNAI^S  OF  THE  AMERICAN  ACADEMY. 

the  United  Kingdom.*  This  last  fact  presents  the  most 
important  and  most  difficult  phase  of  the  problem.  In  spite 
of  the  past  legislation,  the  railways  control  a  large  share  of 
I  the  English  canals  ;  indirectly,  they  dominate  many  more. 
This  indirect  control  comes  about  in  two  ways.  On  the  one 
hand  from  the  fact  that  the  railway-owned  canals  often  con- 
stitute parts  of  longer  lines,  and  on  the  other  hand,  because 
the  railroad,  on  coming  into  competition  with  the  canals, 
has  influenced  them  to  confer  in  fixing  rates. 

The  more  important  provisions  of  the  railway  and  canal 
traffic  act  of  1888,  by  which  it  is  hoped  to  free  the  canals 
further  from  the  domination  of  the  railroad  and  maintain 
them  as  competitors,  are  as  follows  :  The  Railway  Commis- 
sion was  superseded  by  a  Railway  and  Canal  Commission, 
consisting  of  two  commissioners  appointed  by  Her  Majesty, 
and  three  ex-officio  commissioners.  The  three  ex-officio 
members  are  judges  of  a  superior  court,  England,  Ireland 
and  Scotland  each  having  one  of  the  three.  In  England, 
by  the  Lord  Chancellor ;  in  Scotland,  by  the  Lord  President 
of  the  Court  of  Sessions,  and  in  Ireland,  by  the  Lord  Chan- 
cellor of  Ireland,  the  judge  is  designated  who  shall  serve  for 
a  period  of  at  least  five  years  as  ex-officio  railway  and  canal 
commissioner.  The  commissioners  are  given  a  greater 
control  over  rates.  They  can  (Section  31,)  on  the  applica- 
tion of  any  one  interested  in  through  traffic,  order  through 
rates,  and  decide  whether  any  proposed  rate  is  just  and 
reasonable.  Formerly  they  could  act  only  on  the  applica- 
tion of  a  canal  or  railway  company.  The  navigation  owners 
must  make  yearly  reports  to  the  Board  of  Trade  and  the 
Registrar  of  Joint  Stock  Companies  regarding  the  capital, 
revenue,  traffic  and  capacity  of  their  navigations.  No  canal 
can  be  closed  for  more  than  two  days  without  previously 
notifying  the  Board  of  Trade.  By  Section  42,  no  railway 
company  is  allowed  to  acquire  any  interest  in  canals  without 
previously  securing  statutory  authority  therefor.  Every 

*  Cf.  "  Taxes  and  Tolls  on  Inland  Navigation  in  the  United  Kingdom,"  pp.  5-6. 
Edwin  Clements'  Report  to  the  Fifth  International  Congress  on  Inland  Navigation. 


ENGLISH  AND  AMERICAN  WATERWAYS.  31 

canal  company  is  required  (Section  39)  to  submit  revised 
classifications  and  schedules  of  rates  and  tolls  to  the  Board 
of  Trade,  and  these  schedules  are  to  be  submitted  to  Parlia- 
ment for  revision. 

Parliament  has  revised  the  schedule  of  maximum  rates 
which  the  railroads  may  charge  for  the  conveyance  of 
merchandise  traffic.  In  May,  1892,  the  Board  of  Trade 
began  the  investigation  of  the  powers  of  navigation  com- 
panies and  their  rate  charges ;  the  schedules  have  been 
revised  by  the  Board  of  Trade,  but  have  not  yet  been  acted 
on  and  put  in  force  by  Parliament.  As  the  first  step  in 
this  investigation  the  board,  in  pursuance  of  Section  39  of 
the  law,  required  statistical  information  from  each  canal 
and  navigation  company,  and  it  was  found  that  the  paid  up 
capital  invested  in  canals  and  navigations,  not  owned  by 
the  railroad  companies  is  about  $100,000,000.  The  railway 
companies  owning  canals  do  not  separate  the  capital 
invested  in  waterways  from  their  other  capital.  The  total 
traffic  on  all  the  inland  waterways  of  the  United  Kingdom 
reaches  the  considerable  sum  of  36,301,120  tons.  The 
waterways  of  Scotland  are  the  only  ones  showing  actual 
loss  on  investment ;  those  of  England  and  Wales  not  owned' 
by  railway  companies  netted  the  low  profit  of  2.  76  percent ; 
if  Scotland  and  Ireland  be  included,  the  average  falls  to 
two  and  a-half  per  cent. 

Concerning  the  operation  of  the  law  of  1888  it  is  still 
rather  early  to  judge.  One  thing,  however,  may  be  asserted  ; 
should  the  law  result  in  making  competition  possible 
between  rail  and  water  traffic  it  will  only  prepare  the  way 
for  the  revival  of  inland  navigation.  The  inland  navigation 
routes  of  England  must  most  of  them  be  reconstructed  before 
they  become  effective  agents  of  modern  commerce.  This 
will  mean  in  many  cases  the  enlargement  and  improvement 
of  existing  routes,  in  some  cases  the  location  of  new  ones, 
and  doubtless  the  abandonment  of  many  old  ones.  The 
causes  that  have  brought  about  the  present  condition  of 
English  waterways  have  been  cited  here  because  they  seem 


32  ANNALS  OF  THE  AMERICAN  ACADEMY. 

especially  instructive.  From  England's  experience  with 
waterways  under  private  ownership  we  may  learn  much  by 
which  to  guide  our  action  in  the  future.  The  conclusion 
that  we  may  rightly  draw  is  nc/necessarily  that  the  State 
ought  to  own  the  waterways.  \That  the  State  must,  how- 
ever, closely  supervise  the  location,  construction,  and  opera- 
tion of  both  waterways  and  railroads  when  both  are  owned 
by  corporations,  if  it  wishes  to  maintain  the  waterways  as 
competitors  of  the  other  routes,  seems  tobe  a  fact  strongly 
emphasized  by  the  experience  of  England^ 

The  present  condition  of  the  inland  waterways  in  the 
United  States  is  partly  explained  by  the  history  of  their 
construction  and  partly  by  the  industrial  changes  that  have 
taken  place  since  the  introduction  of  the  railroad.  These 
changes  have  made  the  competition  of  railroads  more  ruinous 
to  the  waterways.  The  larger  natural  waterways  of  the  United 
States  are  playing  an  increasingly  important  r61e  in  our 
commerce,  while  most  of  the  old  canals  have  lost  their 
former  commercial  significance.  The  mania  for  canal  build- 
ing seized  the  States  after  the  successful  completion  of  the 
Erie  canal,  in  1825.  New  York,  Pennsylvania,  Ohio, 
Indiana,  entered  upon  the  construction  of  extensive  works 
of  internal  improvement,  and  other  States  aided  private 
enterprise  with  large  contributions  of  money.  In  most 
States  private  companies,  usually  with  State  aid,  constructed 
canals  of  more  or  less  importance.* 

The  total  length  in  1880,  of  the  canals  in  the  United 
States  was  4468  miles.  They  had  cost  $214,041,802.  Of 
these  canals,  1953  miles  had  been  abandoned,  leaving  the 
length  of  those  in  operation  2513  miles,  f  The  only  States 
owning  or  aiding  canals  at  present  are  New  York,  Ohio  and 
Illinois.  The  other  States  have  quite  ceased  to  aid  internal 
improvements.  Most  of  the  canal  property  they  once  owned 

*Ihave  purposely  avoided  going  at  length  into  the  early  history  of  water 
communication  in  the  United  States,  but  have  inserted  in  the  bibliography  at 
the  end  of  the  monograph  those  books  that  I  have  found  useful  in  studying  the 
subject. 

t  Cf.  Report  on  Canals  of  the  United  States.     Tenth  Census,  Vol.  iv. 


ENGLISH  AND  AMERICAN  WATERWAYS.  33 

has  been  abandoned  or  sold  to  private  corporations,  while  a 
few  important  ones  have  been  turned  over  to  the  Federal 
Government.  Such  was  the  case  with  the  St.  Mary's  Canal^ 
constructed  by  the  State  of  Michigan,  and  later,  in  1880, 
handed  over  to  the  United  States.  The  reason  why  the 
Federal  Government  has  taken  such  canals  from  the  States, 
and  the  same  is  true  of  the  many  river  improvements  that 
have  passed  from  the  States  to  the  United  States,  is  not 
because  the  unprofitable  character  of  such  works  made  the 
States  desirous  of  being  rid  of  them,  but  primarily  because 
the  national  importance  of  the  waterways  made  it  preferable 
that  their  improvement,  and  the  control  of  them  should  be 
the  charge  of  the  Federal  Government  rather  than  of  the 
States. 

One  of  the  causes  why  the  States  ceased  making  internal 
improvements  and  sold  or  abandoned  their  canals  was  the 
financial  panic  of  1837.  Many  States  had  gone  heavily  into 
debt  in  constructing  canals  and  improving  waterways,  and 
the  financial  storm  left  them  stranded.  They  were  bank- 
rupt and  had  to  cease  their  works  of  internal  improvement. 
More  than  this,  they  found  the  works  that  had  been  executed 
to  be  in  many  cases  a  burden  to  their  treasury,  and  not  a 
source  of  income.  This  was  partly  due  to  the  fact  that  the 
canals  had  not  always  been  well  located,  and  that  too  many 
had  been  built ;  but  more  because  of  the  war  of  the  railroads 
against  the  waterways.  The  canals  were  mostly  located  while 
the  industries  of  the  States  were  yet  young.  When  the  States 
developed,  the  movement  of  freight  was  often  not  in  the 
direction  of  the  canals,  and  this  left  to  the  waterways  only 
the  comparatively  unimportant  local  traffic.  The  canals, 
poorly  located  and  ill-adapted  to  perform  large  commercial 
services,  were  unable,  in  most  cases,  to  hold  their  own  against 
the  railroads.  The  war  of  the  railroads  on  the  waterways 
was,  very  naturally,  no  less  incessant  here  than  in-  England. 

The  length  of  the  abandoned  canals,  both  private  and  State, 
is  large.  The  canals  in  the  New  England  States  were  private 


34  ANNAI<S  OF  THE  AMERICAN  ACADEMY. 

property,  and  they  have  all  been  abandoned  for  commercial 
purposes.*  New  York  has  abandoned  356  miles  of  lateral 
canals,  in  Pennsylvania  477  miles  have  ceased  to  be  used, 
Ohio  has  abandoned  205  miles,  and  Indiana  379  miles,  f 

The  competition  of  the  railroads  of  Pennsylvania  resulted 
in  the  sale  of  the  canals  to  the  Pennsylvania  Railroad  and  the 
Sunbury  Railroad  in  1857  and  l858-  Ohio  leased  her  canals 
in  1 86 1  to  a  corporation  for  a  period  of  ten  years  at  an  annual 
rental  of  $20,775.  They  were  again  leased  in  1871  for 
another  period  of  ten  years  ;  but  in  1877  the  lease  was  given 
up  because  the  State  had  allowed  the  destruction  of  a  reservoir 
at  Hamilton,  Ohio.  From  December,  1877,  to  May,  1878,  the 
canals  were  in  the  hands  of  a  receiver,  and  then  they  were 
again  placed  under  the  management  of  the  State  Board  of 
Public  Works.  The  State  now  operates  them  and  charges 
tolls  for  their  use. 

In  general  it  may  be  said  that  New  York,  and,  to  a  less 
degree,  Illinois,  are  the  only  States  that  stood  by  their 
water-ways  at  the  critical  period  of  their  history.  That  criti- 
cal time  came  when  the  old  waterways,  adapted  to  the  needs  of 
the  commerce  of  the  third  and  fourth  decades  of  this  century, 
ceased  to  be  fit  routes  for  the  traffic  of  the  succeeding  years 
when  reconstruction  and  development  were  absolutely  essen- 
tial to  their  future  usefulness.  New  York  did  this  in  a 
measure  at  least,  and  her  waterways  are  of  comparative 
importance.  Other  States  pursued  a  different  policy.  Penn- 
sylvania, as  was  seen,  sold  out  her  plant ;  Ohio  leased  hers  for 
a  song  ;  Illinois  was  apathetic  ;  the  other  States  that  had  been 
aiding  private  enterprise  ceased  to  make  further  contributions. 

The  abandonment  of  many  lines  of  State  and  private  canals 
was  wise.  The  canal  mania  had  led  to  many  injudicious  con- 
structions, and  changes  in  commercial  conditions  incident  to 
our  rapid  industrial  development  deprived  others  of  their 

*  They  were  about  two  hundred  miles  long,  and,  with  the  exception  of  the 
Middlesex  Canal,  of  only  minor  importance, 
t  Cf.  Tenth  Census,  Vol.  IV. 


ENGLISH  AND  AMERICAN  WATERWAYS.  35 

usefulness.  The  choice  that  confronted  the  States  lay 
between  selecting  and  improving  the  more  important  routes, 
and  abandoning  all  of  them  either  to  disuse  or  the  ownership 
of  corporations  whose  interests  were  not  those  of  the  general 
public.  With  the  exception  of  New  York  and  Illinois,  the 
latter  course  was  followed,  and  with  results  such  as  were 
anticipated. 

The  present  condition  of  the  canals  in  the  United  States 
need  not  be  dwelt  on  at  length.  The  principal  canals  of 
Pennsylvania  are  owned  by  the  Pennsylvania  Railroad  and 
the  Reading  Railroad,  and  these  companies  have  thus  far 
found  it  to  their  own  interest  to  add  to  the  large  railroad 
plant  which  they  owned  at  the  time  of  the  acquisition 
of  the  canals  and  to  make  the  greatest  possible  use  of  that, 
rather  than  to  undertake  such  a  reconstruction  of  the  water- 
ways as  will  make  them  really  efficient  agents  of  transportation. 
They  have  had  ' c  no  spur  to  prick  the  side  ' '  of  their  intent. 
The  chief  freight  that  the  canals  of  Pennsylvania  transport  is 
coal.  As  the  Reading  Combine  practically  controls  the  coal 
output,  it  fixes  the  price  for  transportation  far  above  the  costs 
of  moving  by  rail.*  The  principal  canal  of  Ohio  is  the  Miami 
and  Brie,  connecting  Cincinnati  and  Toledo.  Its  dimensions 
are  not  only  small,  but  dissimilar  in  different  parts  of  the 
waterway.  From  Cincinnati  to  Dayton,  a  distance  of  sixty- 
five  miles,  it  is  forty  feet  wide  and  four  feet  deep ;  for  the 
next  114  miles,  that  is,  from  Dayton  to  Junction,  it  is  fifty 
feet  wide  and  five  feet  deep  ;  from  Junction  to  Toledo,  sixty- 
four  miles,  the  width  is  sixty  feet  and  depth  six  feet.  Between 
Toledo  and  New  Bremen,  in  the  middle  of  the  State,  there  are 
forty-nine  locks  to  effect  a  rise  of  only  1 1 8  feet.  The  locks, 
furthermore,  are  only  eighteen  feet  wide  and  sixty  feet  long, 
the  construction,  including  the  gates,  being  of  wood. 

Kven  New  York  has  not  of  late  sustained  her  former  liberal 
policy,  and  the  condition  of  her  canals  is  justly  the  subject  of 

*  There  is  some  indication  that  the  Schuylkill  Canal  is  to  be  improved,  because 
the  Reading  is  unable  to  handle  the  coal  demanded  for  the  Philadelphia  market 


36  ANNALS  OF  THE  AMERICAN  ACADEMY. 

complaint.  In  his  report  for  1891  the  Superintendent  of  Pub- 
lic Works,  of  New  York,  calls  the  attention  of  the  Legislature 
to  the  fact  that  there  are  many  improvements  needed,  and  then 
adds  :  "It  should  be  remembered  that,  with  the  single  excep- 
tion of  lock-lengthening,  and  the  ordinary  repairs,  no 
improvements  nor  extensions  have  been  made  to  the  canals 
since  1856.  The  improvements  are  entirely  inadequate  for 
the  purposes  for  which  they  were  intended,  and  additional 
improvements  must  be  made  without  delay  if  the  canal  sys- 
tem of  the  State  is  to  be  preserved  in  all  its  usefulness. ' ' 

This  somewhat  lengthy  discussion  of  the  canals  of  England 
and  the  United  States  prepares  the  way  for  considerations  that 
are  to  follow.  The  waterways  of  France  and  Germany,  which 
are  in  a  much  better  condition  will  be  referred  to  in  the 
next  chapter.  The  present  backward  condition  of  Knglish  and 
American  inland  waterways,  especially  canals,  will  not  be 
remedied  until  the  people  of  the  two  countries  arrive  at  a 
truer  conception  of  the  real  commercial  functions  of  the 
waterways,  and  what  is  necessary  for  the  exercises  of  those 
functions.  The  present  and  future  differ  from  the  past. 
1 4  Canals  as  they  were  a  century  ago  have  no  longer  any  func- 
tion to  fulfill  that  is  worthy  of  serious  consideration.  Their 
mission  is  ended,  their  use  is  an  anachronism*  The  canals  of 
the  future  must  be  adapted  to  the  new  conditions  of  com- 
merce. ' '  * 

*  J.  Stephen  Jeans,  "  Waterways  and  Water  Transportation,"  p.  viti. 


CHAPTER  IV. 

WATERWAYS  AND   RAILROADS   AS  CARRIERS. 

From  the  foregoing  account  of  the  present  condition  of 
inland  waterways  of  England  and  the  United  States  it  would 
hardly  be  expected  that  they,  at  least  the  canals,  are  capable 
of  performing  any  very  important  commercial  service. 
When  one  comes,  however,  to  look  into  the  actual  tonnage 
of  the  freight  moved  on  them  the  figures  are  found  to  be  by 
no  means  small.  The  results  of  the  investigation  are 
encouraging  ;  of  course,  the  traffic  on  the  important  natural 
waterways  is  much  greater  than  on  any  canals,  but  even  the 
latter,  when  well  located  and  constructed,  show  a  large  vol- 
ume of  freight.  The  object  of  this  chapter  is  to  inquire 
what  are  the  actual  services  rendered  by  the  railroads,  the 
natural  waterways  and  canals  as  carriers  of  freight. 

The  statistics  of  traffic  on  railroads  is  quite  complete  in  all 
countries,  but  information  concerning  inland  navigation  is, 
with  the  exception  of  France,  less  thoroughly  gathered. 
The  statistics  that  are  collected  differ  in  character  in  each 
country,  and  do  not  furnish  data  for  much  instructive  com- 
parison of  one  country  with  another.  In  Germany  the 
freight  landed  and  loaded  at  each  inland  harbor  and  that 
which  passes  the  port  are  noted ;  England  leaves  to  the 
owners  of  waterways  the  collection  of  statistics  in  the  way 
they  choose.  In  the  United  States  there  had  been  no  sys- 
tematic attempt  prior  to  the  last  census  to  collect  any 
information  concerning  the  traffic  on  inland  waterways  ;  and 
now  the  statistics,  that  we  have,  give  but  little  data  concern- 
ing inland  navigation  other  than  that  on  the  Great  Lakes 
and  the  Erie  Canal,  and  on  the  rivers  of  the  Mississippi 
Valley.  No  figures  concerning  the  traffic  on  canals  are 
given  by  the  census,  and  in  the  case  of  seaport  towns  no 

(37) 


ANNAI<S  OF  THE  AMERICAN  ACADEMY. 


distinction  is  made  between  inland  and  coastwise  commerce. 
The  statistics  given  are  concerning  all  classes  of  transpor- 
tation in  the  various  ports  of  the  United,  States  the  figures 
being  given  separately  for  each  of  the  five  geographical 
divisions,  the  Atlantic  Coast,  Gulf  of  Mexico,  Pacific  Coast, 
Great  Lakes  and  Mississippi  Valley.*  There  is  no  division 
of  freight  into  different  classes  of  goods  made  in  the  census, 
except  in  the  case  of  the  Great  Lakes  and  the  Mississippi 
River  and  its  tributaries.  In  both  cases  the  freight  is 
classified  in  four  groups  :  products  of  agriculture,  products 
of  mines  and  quarries,  other  products,  and,  fourth,  manu- 
factures, miscellaneous  merchandise  and  other  commodities. 
This  diversity  among  nations  as  to  the  manner  of  collecting 
statistics  of  inland  navigation,  and  classifying  the  freight 
moved  on  waterways  led  the  Third  International  Congress 
on  Inland  Navigation,  1888,  to  appoint  a  committee  to 
report  on  the  best  method  of  gathering  and  classifying  these 
statistics.  The  committee  reported  to  the  Fourth  Interna- 
tional Congress,  1890,  a  detailed  plan  to  be  submitted  to  the 
several  countries  for  adoption.  As  yet,  however,  no  gov- 
ernment has  made  any  movement  to  secure  similarity  of 
Ctistics  in  different  countries  regarding  inland  navigation. 
The  kinds  of  freight  adapted  to  carriage  by  water  are,  in 
leral,  the  raw  mining  and  agricultural  products,  and  bulky 
manufactured  articles  of  comparatively  small  value.  Water 
transportation  must,  except  in  the  case  of  certain  large  rivers 

*  The  importance  of  our  traffic  by  water,  coastwise  and  on  inland  rivers,  is  worth 
noting.  The  following  table  is  taken  from  the  census,  and  is  a  "  Statement  show- 
ing the  freight  movement  in  tons  by  all  classes  of  commercial  craft  of  the  United 
States  operated  during  the  year  ending  December  31,  1889:" 


Geographical 
divisions. 

Total  all 
craft. 

By  steamers. 

Sailing  vessels. 

Unrigged 
craft. 

Totals           

172  no  423 

66,502  718 

6  1  707  702 

A-l  QOO  OOt 

Atlantic  Coast  
Gulf  of  Mexico  
Pacific  Coast 

77,597,626 
2,864,956 
8  818,363 

38,778,341 
i,455,45o 
5,741,940 

38,283,401 
L359-526 

2  761  826 

10,535,884 
49,980 

314  597 

Mississippi  Valley  
Great  Lakes  

29,405,046 
53,424,432 

io,345,504 
20,181,483 

19,302  949 

19,059,542 
13,940,000 

WATERWAYS  AND  RAILROADS  AS  CARRIERS.        39 

and  lakes,  be  slow,  and  when  goods  require  speedy  delivery 
either  on  account  of  their  high  value  or  their  perishable 
nature  they  must  be  shipped  by  rail/  Concerning  the  use  of 
canals  the  Belgian  Engineer,  Theophile  Finet,  lays  down  the 
rule  that,  "To  the  canals  must  fall,  as  far  as  possible,  the 
transportation  of  our  raw  materials,  the  railroads  must 
handle  everywhere  the  finished  products,  ...  all  express, 
and  all  small  articles  of  freight  that  are  shipped  in  large 
quantities."*  The  line  of  separation  cannot,  however,  be 
drawn  so  closely  as  this ;  the  raw  materials  must  exist  in 
large  quantities  in  order  for  the  waterway  to  transport  them 
to  an  advantage,  and  many  finished  products  of  a  bulky 
character  are  well  adapted  to  water  transportation.  The 
kinds  of  freight  that  seek  transportation  on  large  rivers  and 
lakes  where  higher  speed,  larger  cargoes  and  greater  punctu- 
ality are  possible,  will  differ  from  those  going  to  canals.  The 
dividing  line  between  water  and  rail  freights  will  be  less 
rigidly  drawn.  In  general  it  may  be  said  that,  other  things 
being  equal,  goods  will  be  shipped  in  the  way  most  economi- 
cal to  industry  ;  but  even  this  truth  must  not  be  taken  abso- 
lutely. Custom  and  conservatism  are  not  without  influence, 
and  competition,  foreign  and  domestic,  is  often  required 
to  induce  men  to  employ  the  best  "and  cheapest  methods 
of  manufacturing  and  transporting  goods.  Furthermore, 
whether  or  not  shippers  decide  to  send  goods  on  either  canals 
or  natural  waterways,  instead  of  by  rail,  or  vice  versa, 
depends  not  only  on  the  nature  of  the  articles,  but  also  on 
the  circumstances  connected  with  their  shipment,  and  it 
cannot  be  said  absolutely  and  categorically  this  kind  of  goods 
will  go  by  water  and  that  kind  by  rail.  Coal,  iron  ore  and 
wood,  for  instance,  articles  which  generally  admit  of  slower 
transportation,  may  under  certain  conditions  demand  more 
rapid  movement.  Again  during  some  parts  of  the  year  the 
liability  of  accidents  to  freight  sent  by  water  may  induce 

*  Stahl,  "  Brennende  Fragen  Zum  Bau   und  Betrieb  der  Wasserstrassen"   pp. 
169  and  181. 


40  ANNALS  OF  THE  AMERICAN  ACADEMY. 

shippers  to  prefer  the  railroad.  Most  of  all,  if  it  be  neces- 
sary to  tranship  goods  in  order  to  send  them  by  water,  mer- 
chants will  frequently  send  them  by  rail  at  a  higher  rate. 
The  first  of  these  three  circumstances  influences  the  shipment 
of  goods  between  places  directly  connected  by  rail  or  water, 
the  third  one  conditions  the  choice  of  a  railroad  or  waterway 
when  sending  by  water  necessitates  a  transhipment  to  another 
waterway  or  to  a  railroad. 

Keeping  these  limitations  in  mind,  it  may  be  said  that  the 
freight  that  is  actually  shipped  on  waterways  will  indicate 
clearly  enough  the  kinds  of  goods  best  adapted  to  water 
transportation.  In  each  case  it  will  be  seen  that  bulky  raw 
materials  constitute  the  larger  share ;  the  kinds  of  raw 
materials  depending  on  the  industrial  character  of  the  region 
about  the  waterway.  Of  the  tonnage  on  the  Great  Lakes  in 
1889,  27.96  per  cent  was  iron  ore,  24.97  P^r  cent  lumber, 
22.24  Per  cent  coal,  and  12.39  Per  cent  grain,  these  four 
articles  thus  comprising  87.56  per  cent  of  all  the  freight. 
The  Ohio,  the  Rhine  and  the  Elbe  may  be  taken  as  typical 
improved  rivers.  Out  of  a  total  of  5,528,857  tons  shipped 
in  1889  on  tne  Ohio  River  above  Cincinnati,  65,550  tons 
were  salt,  176,877  tons  clay,  sand  and  stone,  617,493  tons 
forest  products,  and  4,338,421  tons  were  coal.  The  freight 
forwarded  from  the  ports  of  the  Rhine  is  mostly  coal,  that 
being  72.26  per  cent;  wood  constitutes  3.83  per  cent,  iron 
ore,  4.06  per  cent ;  salt,  about  1%  per  cent ;  hewed  stone  and 
brick  nearly  the  same  share.  The  traffic  on  the  Elbe  up 
stream  from  Hamburg  consists  of  a  quite  different  class  of 
raw  materials.  In  1889,  31  per  cent  was  grain,  10  percent 
manure,  9  per  cent  ores  and  metals,  5  per  cent  petroleum, 
and  coal  and  wood  each  about  4  per  cent.  The  character 
of  canal  freight  is  shown  by  shipments  on  the  Erie  Canal,  of 
which  the  products  of  the  farm,  the  forest  and  the  mine  con- 
stitute 76  per  cent.  The  freight  on  the  waterways  at  Berlin 
is  mostly  a  barge  traffic  and  affords  a  good  example  of  inland 
navigation  on  ways  practically  artificial.  Of  the  freight 


WATERWAYS  AND  RAILROADS  AS  CARRIERS.        41 

brought  to  Berlin  iu  1890,  49  per  cent  consisted  of  stone  and 
brick,  21  per  cent  of  lime,  earth,  sand,  etc.,  10  per  cent  of 
wood,  7  per  cent  of  coal,  and  6  per  cent  of  grain. 

Such  is  the  nature  of  freight  on  inland  waterways.  What 
its  amount  is  and  how  it  compares  with  that  of  the  railroads 
may  be  shown  by  a  few  statistics  of  the  inland  navigation  of 
some  of  the  leading  countries.  The  traffic  on  the  waterways 
of  Kngland  was  given  in  the  previous  chapter. 

The  statistics  of  the  inland  navigation  in  France  are  the 
most  complete  of  those  of  any  country.  France  is  doing 
more  than  any  other  nation  to  improve  her  inland  waterways, 
and  their  present  condition  may  well  be  considered  in  this 
connection.  By  the  law  of  the  fifth  of  August,  1879,  the 
navigable  waterways  were  divided  into  two  classes,  principal 
and  secondary,  and  the  work  of  extending  the  principal  ones 
and  enlarging  them  to  a  common  size  which  would  permit 
the  navigation  of  boats  of  three  hundred  tons  burden  was 
begun.  The  dimensions  fixed  upon  were :  Depth  of  water, 
6  feet  7  inches  ;  useful  width  of  the  locks,  1 7  feet ;  length  of 
locks,  127  feet;  clear  height  under  the  bridges,  n  feet  7 
inches. 

The  length  of  the  navigable  rivers  in  France  in  1880  was 
6590  kilometres  and  of  canals  4350  kilometres,  the  total 
length  of  both  being  10,940  kilometres.  The  gain  during 
the  succeeding  ten  years  was  rapid.  The  lengths  in  1890 
were :  Rivers,  7563  kilometres ;  canals,  4809  kilometres ; 
total,  12,372  kilometres. 

The  '  *  principal ' '  waterways  having  the  dimensions  fixed 
by  the  law  of  1879  were  1459  kilometres  long  in  1878,  and 
3965  kilometres  in  1890.  Of  the  2506  kilometres  increase, 
1568  kilometres  fell  to  the  canals  and  938  kilometres  to  the 
rivers,  r  Since  1880  the  waterways  of  France  have  been  free 
of  tolls,\md  this  together  with  the  improvements  made  has 
caused  a  rapid  increase  in  inland  navigation^  The  amount 
and  nature  of  the  traffic  on  the  French  waterways  in  1 890  is 
shown  by  the  following  table  : 


ANNALS  OF  THE  AMERICAN  ACADEMY. 


Name  of  group. 

TONNAGE. 

Total 
tonnage. 

Per  cent  of 
total  traffic. 

Kilometre 
tons. 

Per  cent  of 
total  k.  tons 

li 

P 

182 

69 

50 
153 
175 

218 
243 
137 
114 
117 

Rivers. 

Canals. 

Mineral  fuel  
Building  materials, 
minerals  
Fertilizers   

1,993,095 

4,212,248 
843,165 
551,816 
19,888 
424,803 
288,125 
1,711,312 
134,376 
215,558 

4,951,969 

3,475,348 
501,868 
1,048,971 
4,750 
1,288,653 
390,246 
1,803,208 
211,280 
96,664 

6,945,064 

7,687,596 
1,345,033 
1,600,787 
24,638 
i,7i3  456 
678,371 
3,514,520 
345,656 
312,222 

28.7 
3i8 

1:1 

O.I 

1:1 

M5 
I  4 
1-3 

1,267,355,791 

531,800,150 
79,043,978 
245,487,792 
4,326,047 
373,283,415 
155,208,281 
483,411,301 
39,558,515 
36,598,064 

39-5 

16.6 
2.4 
7-6 

O.I 

n.6 
4.8 
I5-I 

1.2 
I.I 

Wood  

Machinery 

Metals  

Manufactures  .... 
Agricultural  products 
Sundries  . 

Rafts 

Total  .... 

10,394.386 

13,772,957 

24,167,343 

100.00 

3,216,073,334 

100.00 

133 

As  compared  with  1881,  the  tonnage  of  1890  shows  an 
increase  from  19,740,239  tons  to  24,167,343  tons,  or  a  gain 
of  22.4  per  cent ;  but  as  the  mean  distance  traveled  by  one 
ton  increased  from  no  to  133  kilometres,  the  kilometre  ton- 
nage rose  from  2,174,531,107  tons  kilometre  in  1881  to 
3,216,073,334  tons  kilometre  in  1890  ;  that  is,  increased  47.8 
per  cent.  It  is  a  fact  worthy  of  note  that,  as  the  above  table 
shows,  the  canal  traffic  of  France  exceeds  that  on  the  rivers. 
A  comparison  of  the  tonnage  of  the  railroads  of  France 
with  that  of  the  waterways  reveals  some  interesting  facts : 
The  kilometric  tonnage  of  the  railroads  of  France  in  1890 
was  11,759,084,088  tons  kilometre,  and  that  of  the  water- 
ways 3,216,073,334.  In  1881  the  figures  were  respectively 
10,752,834,568  and  2,174,531,107.  Thus  the  railroads  show 
an  increase  of  only  9.3  per  cent  in  ten  years,  or  less  than  one 
per  cent  per  annum ;  while  the  waterways,  as  indicated 
above,  have  increased  their  tonnage  47.8  per  cent,  or  about 
4.8  per  cent  a  year.  This  fact  is,  of  course,  largely  to  be 

|  accounted  for  by  the  special  favors  which  the  French  water- 

•  ways  have  received  during  the  decade. 

If  the  total  freight  carried  on  waterways  be  compared  with 
the  total  amount  of  like  freight  transported  by  rail  it  will  be 
seen  that  the  waterways  carried  in  1 890  less  than  one-fourth 


WATERWAYS  AND  RAILROADS  AS  CARRIERS.        43 

(23.84  per  cent)  of  the  total  for  both  ways,  the  tonnage 
being  24,168,000  for  the  waterways,  and,  according  to  M. 
Fleury,  of  Paris,  79,180,000  for  railroads.  Not  too  much 
significance  as  to  the  commercial  importance  of  waterways  is 
to  be  attached  to  this  fact.  The  territory  served  by  the 
waterway  is  much  less  than  that  which  makes  use  of  the 
railroads.  The  railroads  and  waterways  are  not  competitors 
for  all  traffic,  and,  again,  only  a  part  of  the  French  water- 
ways are  so  located  that  they  may  rightly  be  classed  as  prin- 
cipal, and  of  these  only  portions  have  been  reconstructed 
and  given  the  dimensions  provided  for  by  the  law  of  1879. 
The  most  fruitful  comparison  that  could  be  made  is  between 
these  larger  reconstructed  waterways  and  the  railroads  run- 
ning parallel  with  them,  but  unfortunately  the  necessary 
data  for  this  are  not  at  hand.  There  were,  in  fact,  in  1890 
only  5621  kilometres  of  waterways  and  4956  kilometres  of 
railroads  running  parallel  with  each  other  in  France,*  and 
the  length  of  the  waterways  having  the  dimensions  provided 
for  by  the  law  of  1879—  depth  6  feet  7  inches,  width  of  locks 
17  feet,  length  of  lock  127  feet,  height  under  bridges  n  feet 
7  inches — was  only  3288  kilometres. 

The  different  waterways,  even  of  France,  present  such  a 
variety  of  dimensions  as  to  hinder  inland  navigation.  The 
necessity  for  having  common  dimensions  for  waterways  and 
their  locks  must  be  apparent  to  all.  Suppose  that  the  railroads 
connecting  Chicago  and  New  York  consisted  of  five  parts 
each  with  different  dimensions  so  that  freight  between  the 
two  places  would  have  to  be  transhipped  four  times,  what 
would  be  the  effect  on  transportation  by  rail !  The  tonnage 
would  be  much  smaller  and  the  ton  mileage  would  fall  pro- 
portionally more  than  the  tonnage.  The  influence  of  giving  a 
part  of  the  French  waterways  like  dimensions  has  been  to 
increase  both  the  volume  of  traffic  and  its  average  distance 
of  shipment. 

*  Cf.    Fleury,  pp.  18-19.    "  Report  on  Respective  Uses  of  Waterways  and  Rail- 
ways," to  the  Fifth  International  Congress  on  Inland  Navigation. 


44  ANNAI3  OF  THE  AMERICAN  ACADEMY. 


The  traffic  on  German  waterways  is  large,  chiefly  because 
of'the  long  navigable  rivers  of  the  country^  The  Rhine, 
Weser,  Elbe  and  Oder  are  important  streams  flowing  from 
the  forests  and  mines  of  the  South  through  the  agricultural 
plains  of  the  North  to  the  large  seaports  on  the  Baltic  and 
North  Seas.  These  conditions,  most  favorable  to  commerce, 
have  been  turned  to  good  account  by  the  improvement  of  the 
rivers,  and  now  there  is  on  the  Rhine  and  Elbe  and  lower 
Oder  a  large  and  important  traffic.  The  shipments  at  the 
German  ports  of  the  Rhine  reached  13,151,246  tons  in  1890. 
The  total  for  all  the  Rhine  was  18,971,072  tons.*  The  navi- 
gable length  of  the  German  portion  of  the  Rhine  is  about 
the  same  as  the  main  line  of  the  Reading  Railroad,  and  it  is 
an  interesting  fact  that  the  traffic  on  the  two  is  about  the 
same.  The  total  tonnage  on  the  Elbe  in  1890  was  about 
8,000,000  tons.  The  passenger  traffic  on  these  rivers  is 
naturally  important,  though  the  figures  when  compared  with 
those  for  the  railroads  seem  small.  The  two  more  important 
of  the  three  companies  running  passenger  steamers  on  the 
Rhine  carried  1,172,354  persons  in  1890.  The  same  year 
2,348,000  persons  made  use  of  the  Elbe  in  Saxony  and 
Bohemia ;  this  passenger  traffic,  however,  was  more  local 
than  that  of  the  Rhine. 

The  connection  of  these  large  rivers  by  means  of  canals 
has  been  only  partially  accomplished.  Three  short  canals  in 
Brandenburg  enable  the  traffic  of  the  Elbe  and  Oder  to  reach 
Berlin.  Over  four  million  tons  of  freight,  exclusive  of  rafts, 
were  taken  by  boat  to  Berlin  in  1890,  nearly  as  much  as  was 
brought  to  the  city  by  all  the  railroads,  f  The  other  canals 
of  Germany  have  only  a  small  traffic,  either  because  of  their 
poor  location,  or  by  reason  of  their  small  dissimilar  dimensions. 
Prussia  is  now  constructing  a  canal  from  the  coal  mines  at 

*  In  reality  the  amount  is  more  than  this,  statistics  being  collected  at  only  the 
principal  ports,  much  that  is  shipped  is  not  counted.  One  basalt  company,  for 
instance,  shipped  414,856  tons  of  which  no  account  was  made  in  the  statistics. 

t  This  shows  the  possibilities  of  barge  traffic  to-day,  even  under  only  moder- 
ately favorable  conditions.  The  average  lading  of  a  boat  was  only  114  tons. 


WATERWAYS  AND  RAILROADS  AS  CARRIERS.        45 

Dortmund  to  the  seaport  Kmden,  and  has  authorized  a  Rhine- 
Kibe  canal  to  connect  the  Rhine  region  with  the  Kibe  and 
Oder  and  thus  the  mining  West  with  the  agricultural  Kast._ 
Prussia  and  the  Kmpire  are  together  constructing  the  Nord- 
Ost-see  Canal  to  join  the  German  Ocean  with  the  Baltic  Sea 
by  means  of  a  waterway  through  German  Territory.  These 
works,  when  completed,  will  surely  greatly  increase  the 
inland  navigation  of  Germany.  Because  of  the  method 
of  collecting  statistics  only  of  the  freight  loaded  and 
unloaded  at  the  principal  ports,  the  actual  traffic  at  present 
cannot  be  accurately  stated.  In  1885  these  statistics  for  8900 
kilometres  of  waterways  showed  a  kilometric  tonnage,  exclu- 
sive of  the  coast- wise  commerce,  of  3,535,000,000,  and  it  is 
estimated  that  the  traffic,  concerning  which  statistics  are  lack- 
ing, would  bring  the  total  up  to  4,800,000,000  tons  kilometre 
for  all  German  waterways.* 

The  relation  between  the  traffic  by  rail  and  by  water  in 
Germany  acquires  added  interest  from  the  fact  that  the  State 
owns  both  means  of  transportation.  The  railroads  and 
waterways  being  under  separate  management,  however,  not 
a  little  rivalry  has  existed  between  the  two  ways  and  this  has 
tended  to  hinder  the  best  co-ordination  of  the  railroads  and 
waterways.  This  has  of  late  been  less  evident,  the  mutual 
relationship  of  the  two  agents  has  been  more  friendly,  and 
the  commerce  by  water  has  relatively  increased.  In  1890 
thirty  per  cent  of  the  inland  traffic  of  Germany  moved  by 
water.  The  equality  of  shipments  to  Berlin  by  rail  and 
on  waterways  essentially  artificial  has  been  mentioned.  The 
uselessness  of  setting  over  against  the  100,918,874  tons  of 
freight  moved,  1890,  by  all  the  railroads  of  the  German  por- 
tion of  the  Rhine  Valley  the  13,714,372  tons  carried  on  the 
Rhine  must  be  self-evident.  To  do  this  is  to  compare  the 
traffic  of  6800  miles  of  railways,  consisting  of  twenty  lines 
starting  from  a  great  many  cities  and  radiating  in  all  direc- 
tions to  supply  the  markets  of  the  interior  and  the  most 

*  Cf.  Schlichting,  Conrad's  Handworterbuch,  Vol.  ii.,  p.  837. 


46  ANNALS  OF  THE  AMERICAN  ACADEMY. 

distant  parts  of  the  Empire  with  goods  of  all  descriptions, 
with  the  freight  moved  on  the  1172  miles  of  the  waterways, 
rivers  and  canals,  of  the  Rhine  Valley,  that  is,  with  but  a 
few  water  routes  and  those  practically  without  water  com- 
munication with  other  parts  of  Germany,  water  routes  whose 
tonnage  is  from  the  nature  of  the  case  composed  of  fewer 
articles  of  transportation  than  the  railroads  carry.  Indeed, 
the  German  Rhine,  constituting  less  than  a  third  of  the  total 
1172  miles  of  the  navigable  waterways  of  the  German  Rhine 
Valley,  is  the  only  part  adapted  to  the  needs  of  present  navi- 
gation. We  find,  for  instance,  that  nine- tenths  of  the  coal — 
/  the  article  especially  fitted  to  water  transportation — that  is 
j  shipped  in  the  Rhine  Valley  goes  by  rail  and  one-tenth  by 
1  water ;  but  if  the  coal  shipments  from  Duisburg,  Ruhrort, 
and  Hochfeld,  Rhine  ports  of  the  Westphalian  coal  region, 
be  examined,  it  is  found  that  the  railroads  carry  only  forty  per 
cent  as  much  as  the  Rhine.*  In  general,  it  may  be  said  that 

I  the  traffic  on  the  German  waterways  is  large  and  is  increasing 
pari  passu  with  that  of  the  railroads  ;  when  the  work  of 
further  connecting  the  separated  systems  of  natural  waterways 
is  completed  the  freight  on  the  waterways  will  assume  much 
larger  proportions  than  it  now  possesses. 

Definite  statistical  comparison  of  the  traffic  by  rail  and  by 
water  within  the  United  States  is  even  more  difficult  than  in 
the  case  of  other  countries.  With  the  exception  of  the  Erie 
Canal  we  know  very  little  about  the  tonnage  of  goods  moved 
on  canals,  and  to  contrast  freight  movements  on  parallel  rail- 
roads and  rivers  is  practically  impossible.  The  immense 
proportions  of  our  inland  commerce  both  by  rail  and  by  water 
are  familiar  facts.  Our  most  important  barge  canal  is  the 
Erie  which  is  used  to  transport  three  to  three  and  a  half  mil- 
lion tons  yearly.  The  eleventh  census  gives  detailed  statistics 
concerning  the  traffic  on  the  rivers  of  the  Mississippi  System. 
The  facts  of  the  Ohio  River  and  its  branches,  above  Cincinnati, 

*  Cf.  Van  der  Borght,  p.  7,  Report  to  the  Fifth  International  Congress  on  Inland 
Navigation. 


WATERWAYS  AND  RAILROADS  AS  CARRIERS.        47 

are  especially  interesting  ;  here  5214  craft  in  1889  moved 
10,744,063  tons  of  freight.  The  ton  mileage  was  2,076,866,- 
145  ton  miles,  each  ton  being  moved  on  an  average  nearly 
two  hundred  miles.  The  figures  quite  warrant  the  statement 
in  the  census  ' '  that  the  waterways  of  the  Ohio  River  and  its 
tributaries  are,  under  present  conditions  of  transportation,  of 
great  importance  so  far  as  low-class  freight  is  concerned." 
The  tonnage  of  the  rivers  of  the  Mississippi  Valley,  1890,  was 
placed  at  31,050,058  tons  ;  this,  though  large,  is  probably  less 
than  the  actual  amount.  To  move  this  freight  and  to  carry 
the  10,858,894  passengers  that  made  use  of  the  river,  7445 
boats  were  employed.  The  commerce  on  the  Great  Lakes 
is  enormous.  The  total  tonnage  passing  the  St.  Mary's 
lock,  between  L,ake  Superior  and  L,ake  Huron,  was,  for  the 
year  ending  June  30,  1892,  10,107,603  tons.  The  ton  mile- 
age of  the  lake  freight  in  1890  was  18,849,681,384  ton  miles, 
27//2  per  cent  of  the  ton  mileage  of  all  the  railroads  of  the 
United  States. 

There  is  no  necessity  for  multiplying  statistics  of  this  kind. 
The  magnitude  and  importance  of  the  commerce  of  our  large 
inland  lakes  and  rivers  are  well-known.  The  present  traffic 
on  the  canals  in  the  United  States  is  small  and  for  reasons 
which  have  been  sufficiently  elaborated.  We  know  very  little 
about  the  use  that  is  actually  made  of  most  of  our  canals  now 
in  operation,  and  if  we  did  the  information  would  be  of  little 
significance  as  regards  the  real  relation  of  artificial  water- 
ways, equipped  with  the  most  modern  improvements,  to  rail- 
ways as  carriers  of  freight.  It  is  useless  to  compare  the  canal 
as  it  now  is  to  the  railroad.  Were  we  to  compare  an  ox  and 
a  horse  as  to  the  services  each  can  perform,  we  should  doubt- 
less agree  that  the  horse  moves  quicker  and  is  able  to  do  more 
kinds  of  work  ;  but  justice  to  the  ox  would  compel  us  to  take 
animals  of  equal  age  and  soundness.  So  with  the  canal. 


CHAPTER  V. 

INFLUENCE  OF  INLAND   WATER  ROUTES  ON   RAILROAD 
TARIFFS. 

The  influence  of  canals,  improved  rivers  and  lakes,  as 
regulators  of  railroad  tariffs,  is  a  subject  of  interest  alike  to 
those  countries  whose  railways  are  under  private  ownership 
and  management  and  to  those  which  themselves  own  the 
means  of  transportation.  The  control  of  rates  on  private 
railroads  has  presented  to  legislators  a  problem  they  have  as 
yet  been  able  only  partially  to  solve.  After  sixty  years  of 
effort  on  the  part  of  the  English  Parliament,  first  to  prevent 
<•  combination,  then  to  secure  reasonable  rates,  England  has 
the  highest  railway  charges  of  any  country.  The  estab- 
lishment of  maximum  rates  by  law  is  no  guarantee  of 
moderate  charges.  (In  this  country  the  attempt  to  control 
rates  by  rail  led  to  the  vigorous  attack  of  the  Western  States 
against  the  railroads  by  means  of  the  "  Granger  legislation.'*) 
This  policy  was  soon  abandoned,  and  the  State  railroacl 
commissions  were  given  wider  powers  and  increased  func- 
tions. The  State  commissions  having  no  power  to  lay  down 
rules  concerning  charges  on  interstate  commerce,  the 
national  commission  was  established  in  1886  with  power  to 
supervise  interstate  traffic,  and  to  compel  revisions  of  rates 
when  charges  are  unreasonable  or  when  they  are  unfair  to 
particular  shippers.  All  this  is  evidence  that  some  control 
over  the  administration  of  private  railway  companies  and 
some  regulation  of  their  tariffs  are  considered  necessary. 
The  results  of  the  commissions'  efforts,  whatever  may  be 
said  of  their  value,  and  they  are  indeed  important,  have  in 
no  sense  solved  the  question  of  rate  charges.  Only  the 
threshold  of  the  problem  has  been  reached,  and  the  investi- 
gations of  the  commission  have  only  enforced  the  need  and 
importance  of  inland  waterways  to  set  limits  to  railroad 

(48) 


WATER  ROUTES  AND  RAILROAD  TARIFFS.          49, 

charges  and  to  exercise  a  constant  pressure  in  the  direction 
of  cheaper  rates  and  more  efficient  service. 

There  is  a  vital  difference  between  the  railway  and  tlieT 
public  waterway.  The  lakes  and  large  navigable  rivers  of  I. 
every  country  are  public  highways  accessible  to  all.  Any  I 
shipper  who  will  may  navigate  them  with  his  own  boats, 
and  at  present  usually  without  payment.  Canals  owned  by 
the  State  are  likewise  highways,  either  free  or  toll,  and  those 
owned  by  corporations  or  individuals  are  usually,  at  least  m 
theory,  ways  on  which  individual  shippers  may  compete. 
With  the  railway  it  is  different ;  the  conditions  necessary  to 
its  successful  management  have,  at  least  up  to  the  present, 
prevented  its  being  a  highway  open  to  the  common  use  of 
individual  shippers.  As  is  well  known,  the  railroad  was  at 
first  supposed  to  be  of  the  same  character  as  the  turnpike. 
The  first  laws  both  in  England  and  in  the  American  States 
were  framed  with  that  idea  in  mind.  It  was  not  long  before 
the  error  was  discovered,  and  in  1839  the  fact  of  the  inability 
of  individual  shippers  to  compete  on  a  railroad  by  running 
their  own  cars  and  trains  was  definitely  recognized  by  Par- 
liament. 

Another  truth,  and  one  of  greater  significance,  began  to 
manifest  itself  early  in  the  history  of  railroads,  viz.,  the  fact, 
/that  combination  and  monopoly,  and  not  competition,  is  tke\^ 
\natural  law  governing  the  relations  of  railways  to  each  other^  f  \ 
This  law  was  not  so  easily  comprehended  as  was  the  fact  of  ^ 
the  difference  between  the  railway  and  the  turnpike  ;  indeed, 
there   are  still   many  to-day  who  fail  to  comprehend  the 
monopolistic  character  of  railroad  business.     It  may  be  said, 
as  a  general  statement,  that  the  chief  aim  of  legislation  for 
the  control  of  railway  charges  has  been  to  maintain  com- 
petition in  a  business  which  is  by  nature  monopolistic. 

A  few  persons  early  discovered  the  real  nature  of  the  rail- 
way.  As  early  as  1836,  Mr.  Morrison,  a  man  whose  voice 
on  later  occasions  was  often  heard  on  railroad  questions, 
made  a  speech  in  Parliament  that  can  be  read  with  profit; 


50  ANNAI«S  OP  THE:  AMERICAN  ACADEMY. 

even  to-day.*  "Suppose,"  he  said,  "that,  in  spite  of  all 
the  difficulties  opposed  to  the  formation  of  a  new  company, 
one  is  formed,  obtains  an  act,  and  actually  conies  into  com- 
petition with  the  present  line,  would  not  the  obvious  inter- 
ests of  both  parties,  unless  prevented  by  such  precaution  as 
I  have  proposed  (periodical  revision  of  rates  by  the  govern- 
ment), inevitably  bring  about  some  understanding  between 
them  by  which  the  high  charges  would  be  further  confirmed 
and  all  chances  of  competition  removed  to  a  greater  distance. ' '  f 
The  inefficiency  of  competition  between  railroads  to  regu- 
late tariffs  and  insure  reasonable  rates  was  clearly  emphasized7 
by  Mr.  Gladstone  in  1844  in  his  speech  in  support  of  the 
railway  bill  of  that  year  to  provide  a  modicum  of  parlia- 
mentary control  of  railroads.  "  It  was  said  let  matters  go 
on  as  at  present,  and  let  the  country  trust  to  the  effects  of 
competition.  Now  for  his  part  he  would  rather  give  his 
confidence  to  a  Gracchus,  when  speaking  on  the  subject  of 
sedition,  than  give  his  confidence  to  a  railwa}r  director, 
speaking  to  the  public  of  the  effect  of  competition — railway 
companies  were  singularly  philanthropic  among  themselves. 
Their  quarrels  were  like  lovers'  quarrels  and  they  reminded 
him  of  a  quotation  once  felicitously  made  use  of  by  Mr. 
Fox  :  '  Breves  inimicitice,  amicititz  sempiturnee .'  "J 

*  Hansard's  Parliamentary  Debates,  third  series,  vol.  xxxiii.,  p.  980. 

f  The  advocates  of  the  municipal  ownership  of  water,  gas,  electric  lighting,  etc., 
will  be  interested  in  one  of  the  arguments  used  by  Mr.  Morrison  to  substantiate 
his  thesis.  "  The  history  of  our  metropolitan  water  companies  is  most  instructive 
on  this  point.  After  a  fierce  contention  among  themselves,  they  came  to  an  agree- 
ment by  which  they  parceled  the  town  into  districts  ;  and  having  assigned  one  to 
each  company,  they  left  it  to  obtain  from  the  inhabitants  the  utmost  it  can  obtain, 
and  to  profit,  without  let  or  hindrance  of  any  kind,  by  the  extension  of  this  ever- 
growing metropolis  !  The  public,  too,  is  served  not  merely  with  a  dear,  but  also  a 
bad  article  ;  and  the  probability  of  relief  is  more  distant  than  it  would  have  been 
had  some  of  the  companies  not  been  established." 

It  is  interesting  to  compare  this  statement,  made  in  1836,  with  one  made  in  1893, 
concerning  the  electric  lighting  company  of  Philadelphia  :  "At  present  the  com- 
pactly built  areas  are  parceled  out  among  existing  companies  by  an  agency  which 
refuses  to  declare  itself  except  in  its  actions.  The  monopoly  thus  established  pos- 
sesses such  power  over  Councils  that  the  city  will  be  forced  to  expend  about  $225,00* 
in  1893  in  excessof  the  amount  for  which  it  could  produce  the  li^ht,"  etc.  Re- 
port of  the  Citizens'  Municipal  Association  of  Philadelphia. 
t  Hansard's  Debates,  third  series,  vol.  Ixxvi.,  p.  500. 


WATER  ROUTES  AND  RAILROAD  TARIFFS.          51 

The  tendency  toward   combination  is  equally  strong   in  J 
the  case  of  railroads  and  competing  private  waterways,  and  1 
unless  prevented   from   so   doing  the)'  will  unite  to  secure 
higher  rates.     In  England  this  was  observed  by  Parliament 
to  be  the  case  as  early  as  1840,  and  the  subsequent  struggle 
of  the  two  agents  of  commerce  furnished  ample  evidence  of 
the  strength  of  the  tendency.     The  English  railroads  usually 
bought  the  canals,  because  they  wanted  to  control  rates,  and! 
seldom  because  they  wished  to  use  the  waterway  for  moving ,' 
freight.      The   chief  purpose   of  English   legislation,   since 
1872,  has  been  to  stop  the  destruction  of  the  canals  by  the 
railroads,   and,  by  keeping  the  waterways  independent,   to 
preserve  them  as  regulators  of  freight  tariffs. 

In  America,  as  well  as  in  England,  it  was  early  attempted 
to  prevent  the  combination  of  waterways  with  railroads  and 
to  preserve  the  former  as  regulators  of  the  charges  by  the 
latter.  Article  XVII  ;  Section  4  of  the  Constitution,  which 
Pennsylvania  adopted  in  1873,  declares  : 

"  No  railroad,  canal,  or  other  corporation,  or  the  lessees,  purchasers 
or  managers  of  any  railroad  or  canal  corporation,  shall  consolidate 
the  stock,  property,  or  franchises  of  such  corporation,  with,  or  lease  or 
purchase  the  works  or  franchises  of,  or  in  any  way  control  any  other 
railroad  or  canal  corporation  owning,  or  having  under  its  control  a 
parallel  or  competing  line  ;  nor  shall  any  officer  of  such  railroad  or 
canal  corporation  act  as  an  officer  of  any  other  railroad  or  canal 
corporation  owning  or  having  the  control  of  a  parallel  or  competing 
line  ;  and  the  question  whether  railroads  or  canals  are  parallel  or 
competing  lines:  shall,  when  demanded  by  the  party  complainant, 
be  decided  by  a  jury,  as  in  other  civil  issues." 

That  the  American  legislation  availed  even  less  than 
the  English  in  checking  the  consolidation  of  railroads 
with  one  another  or  with  canals  was  made  evident  by  the 
discussion  in  the  preceding  chapter  on  the  present  condition 
of  English  and  American  waterways.  In  America  we  have 
not  been  so  assiduous  as  have  the  English  in  trying  to  control 
rates  by  endeavoring  to  check  the  workings  of  the  law  of 
consolidation  and  monopolization  in  the  railway  business.  A 


52  ANNALS  OF  THE  AMERICAN  ACADEMY. 

bill,  for  instance,  introduced  this  year  into  the  Pennsylvania 
Senate  to  enforce  the  above  clause  of  the  Constitution  was 
reported  with  a  negative  recommendation.  But  if  we  had 
tried  as  hard  as  England  we  should  doubtless  have  had  no 
greater  success  than  she. 

Competition,  it  is  true,  is  not  absent  from  the  railroad 
business.  It  is  felt  in  many  instances  in  through  freight  and 
passenger  traffic  between  important  and  distant  centres,  and 
has  been  the  spur  that  has  urged  forward  many  improve- 
ments in  service,  and  kept  down  freight  rates  to  numerous 
shipping  points.  Competition  has  even  been  strong  enough, 
it  will  be  said,  to  lead  to  many  railroad  wars.  An  analysis  of 
competition  between  railroads,  however,  shows  it  to  exist  at 
only  comparatively  few  points.  Moreover,  when  and  where 
it  has  obtained  strongly,  and  has  led  to  war,  its  working  has 
been  spasmodic  and  harmful  rather  than  beneficial.  The 
railway  war  is  usually  followed,  as  are  other  wars,  by 
increased  taxes  to  cover  the  costs  of  the  conflict. 

There  is  every  effort  made  by  railway  managers  to  avoid 
competition  one  with  another.  The  few  important  systems 
are  rapidly  getting  control  of  the  principal  lines  of  the 
United  States,  and  they  are  following  up  this  action  by  one 
that  naturally  succeeds.  They  are  dividing  up  the  country 
into  sections,  each  system  receiving  control  of  the  traffic  of  a 
special  portion.  As  one  instance  out  of  many  may  be  cited 
the  action  taken  last  March  by  the  "  New  York,  New  Haven 
and  Hartford  Railroad"  and  the  "Boston  and  Maine." 
A  joint  committee  represented  on  the  part  of  the  New  Haven 
by  J.  Pierpont  Morgan,  William  Rockefeller  and  William 
D.  Bishop,  and  on  the  part  of  the  Boston  and  Maine  by 
Frank  Jones,  G.  G.  Haven  and  Samuel  C.  Lawrence,  met 
and  agreed  to  divide  New  England  between  the  two  roads. 
Their  agreement  was  ratified  by  the  directors  of  the  two 
companies,  and  was  to  the  effect  that  the  Boston  and  Maine 
should  have  that  part  of  New  England  north  of  the  ' '  Boston 
and  Albany  ' '  line,  and  that  the  New  Haven  should  have  the 


WATER  ROUTES  AND  RAILROAD  TARIFFS.          53 

portion  south  of  that.  Bach  company  agreed  not  to  inter- 
fere with  the  territory  of  the  other  and  to  interchange, 
as  far  as  possible,  all  the  business  of  the  two  territories. 

There  is  a  growing  dissatisfaction  with  competition  between  / 
railroads  as  the  safeguard  of  the  public's  interests,  and  a'' 
growing  conviction  that  combinations  and  pooling  agreements 
are  for  the  good  of  the  public  as  well  as  the  railroads.  Rail- 
road managers  are,  it  is  true,  in  favor  of  combination  and 
pooling,  and  there  is  no  doubt  that  their  concern  is  rather  for 
their  own  dividends  than  for  the  weal  of  the  public  ;  but  up 
to  a  certain  limit — which  limit  we  must  look  to  governmental 
control  to  find  and  establish  in  such  a  way  as  to  prevent  its 
being  overstepped  by  the  railways — the  interests  of  the  rail- 
roads and  the  public  are  common.  The  Interstate  Commerce 
Commission,  to  whom  the  American  people  look  as  one  means 
of  defending  their  interests  against  the  encroachments  of  the 
railroads,  favor  pooling,  and  rightly  believe  that  regulated 
combination  is  more  to  be  desired  than  attempts  to  keep  up 
a  competition  among  railroads.*  A  uniform  classification  of 
freight  common  to  all  roads,  stability  of  rates,  and  equal 
treatment,  under  similar  conditions,  of  all  shippers  by  carriers 
are  the  main  objects  that  the  commission  is  striving  to  attain. 
Believing  that  stability  of  rates  and  prevention  of  discrimina- 
tions are  impossible  without  allowing  pooling  contracts,  it 
caused  a  bill  to  be  introduced  into  the  Senate  in  December, 
1892,  permitting  contracts  between  competing  lines  for  the 
division  of  freight,  subject  to  the  approval  or  disapproval  of 
the  Interstate  Commerce  Commission.  Of  course  the  desir- 
ability of  permitting  pooling  is  a  question  on  which  there  is 
difference  of  opinion.  The  bill  to  permit  pooling  failed  to 

*  "  The  railroads  of  this  country  are  practically  parts  of  one  great  system  instead 
of  being,  as  is  popularly  supposed,  made  up  of  individual  lines,  each  having  the 
right  to  act  independently  of  the  others.  For  the  prevention  of  this  waste  of  strife, 
as  well  as  contributing  to  equality  of  service,  that  form  of  traffic  compacts  called  a 
pool  agreement  promises  to  afford  the  desired  relief,  by  removing  from  carriers  the 
possibility  of  profiting  either  individually  or  collectively  by  such  means."  James 
Peabody,  editor  of  the  Railway  Review,  on  "  The  Necessity  for  Railway  Compacts 
under  G«verni»eatal  Regulation,"  in  the  Independent,  June  i,  1893. 


54  ANNAI^  OF  THE  AMERICAN  ACADEMY. 

reach  the  Senate.  The  chairman  of  the  Committee  on 
Interstate  Commerce,  Mr.  Cullom,  and  the  majority  of  his 
associates  were  opposed  to  the  bill  and  their  attitude  was  made 
less  friendly  by  the  fact  that  the  chief  advocates  of  the 
measure  were  railroad  presidents. 

Still  time  must  surely  show  that  the  Senate  committee 
was  in  error  and  demonstrate  the  correctness  of  the  position 
taken  by  the  Interstate  Commerce  Commission.  That  pool- 
ing alone  will  secure  low  rates  is  not  the  contention,  but 
history  plainly  shows  that  the  principle  of  combination,  to 
enforce  which  pooling  is  a  device,  is  being  recognized  as  the 
dominant  one.  Attempts  to  maintain  competition  by  the 
j  prevention  of  pooling  will,  in  the  long  run,  be  futile,*  and 
i  were  it  possible  for  them  to  succeed  they  would  not  ultimately 
secure  as  cheap  rates  as  combination  under  government 
regulation  ;  they  would  establish  in  the  railroad  business  a  law 
antagonistic  to  its  most  efficient  and  most  economical  maii- 
agement.f 

(The  best  regulator  of  railroad  rates  is  the  independent 
waterway.  ^  Competition  between  railroads  and  water  routes 
is  quite  different  in  kind  from  that  of  railroads  with  each 
other  ;  it  is  bound  to  produce  cheaper  rates,  and  can  do  this 
without  detriment  to  the  railroads.  The  present  chapter  will 
vShow  how  extensive  and  important  a  power  the  waterway 
exerts  in  lowering  charges  by  rail ;  the  influence  of  this  on 
the  railroads  will  be  discussed  in  the  next  chapter. 

There  is  abundant  evidence  showing  the  power  of  water 
transportation  to  lower  freight  rates.  The  past  and  present 
opposition  which  the  railroads  have  shown  the  waterways  i:i 

*  Witness  the  agreement  of  last  November  (1892)  among  the  trunk  lines  in 
regard  to  passenger  rates  to  the  World's  Fair. 

I  By  a  resolution  of  the  Senate,  April  15,  1893,  the  Senate  Committee  on  Inter- 
state Commerce  has  been  empowered  to  carry  on  an  investigation  concerning  cer- 
tain alleged  -weaknesses  of  the  law  regulating  interstate  commerce,  with  a  view- 
to  proposing  amendments.  The  resolution  enumerates  the  following  four  subjects 
for  the  committee  to  investigate  :  pooling,  the  short  haul  clause,  Canadian  compe- 
tition, and  labor  on  railroads.  Of  course  the  committee  can  introduce  amend- 
ments OB  as  many  other  subjects  as  it  may  see  fit. 


WATER  ROUTES  AND  RAILROAD  TARIFFS.          55 

order  that  rates  might  be  controlled  indicates  clearly  enough 
that  the  railroads  are  conscious  of  the  potency  of  water  j 
competition.  The  railroads  see  in  the  waterway  an  agency 
which  can  move  certain  kinds  of  freight  at  lower  rates  than 
they  can  be  transported  on  land  ;  and  without  analyzing  the 
results  of  this  to  see  what  may  be  the  secondary  effects  on 
the  freight  business  by  rail  of  the  cheaper  transportation 
charges  for  these  certain  kinds  of  goods,  the  railroad  strives  j 
to  quash  the  waterway  out  of  existence.  The  success  of  the 
railroad  companies  of  England,  of  Pennsylvania  and  of  Ohio 
in  this  regard  has  been  noted. 

An  illustration  out  of  many  that  might  be  cited  to  show 
the  real  and  effective  competition  of  waterways  is  afforded 
by  Belgium.*  Liege  and  Antwerp  are  connected  by  a  line 
of  navigation  156  kilometres  long  that  comes  in  competition 
with  two  railroads  somewhat  shorter  in  length.  The  water 
rates  ' '  often  come  as  low  as  "  2  francs  15  centimes  to  2  francs 
30  centimes  per  ton  for  the  entire  distance.  In  order  to 
compete,  the  railroads  carry  at  their  lowest  rate  between 
L,ie*ge  and  Antwerp.  In  train  load  lots  of  200  tons,  for 
exportation  by  sea,  they  charge  only  two  francs  a  ton.  This 
is  a  special  rate,  all  others  being  enough  higher  than  by  boat 
to  enable  the  waterways  to  secure  a  good  volume  of  freight. 

The  cheapest  freight  rates  by  rail  to  be  found  in  the  world 
are  those  for  grain  between  Chicago  and  New  York  ;  and  why  ? 
Because  the  cheapest  inland  water  transportation  rates  in  the 
world  are  those  between  the  same  points.  All  the  railroads 
of  the  United  States  have  been  steadily  lowering  freight 
charges  during  the  past  twenty  years,  and  largely,  of  course, 
because  improvements  in  track  and  equipment  have  made  this 
possible.  Those  roads,  however,  that  have  made  the  most 
improvements  and  the  greatest  reductions  in  rates  are  the 
great  trunk  lines  leading  into  New  York  from  the  West, 
those  that  compete  with  the  Great  Lakes,  the  Brie  Canal  and 

*  Dufourny,  p.  9  of  article  in  Report  of  Fourth  International  Congress  on  Inland 
Navigation. 


56  ANNAI^S  OF  THE  AMERICAN  ACADEMY. 

the  Hudson  River.  The  average  freight  earnings  per  ton 
mile  of  all  the  railroads  of  the  United  States  for  the  year 
ending  June  30,  1890,  were  .941  cents.*  The  ton  mile 
earnings  of  the  New  York  Central  and  Hudson  River  Rail- 
road were  .730  cents,  and  on  the  Pennsylvania  Railroad,  .661 
cents  ;  on  the  Lake  Shore  and  Michigan  Southern,  .653  cents, 
and  on  the  Michigan  Central,  .726  cents ;  whereas  the  aver- 
age earnings  per  ton  mile  on  the  Chicago,  Milwaukee  and 
St.  Paul,  and  the  Chicago  and  Northwestern,  roads  coming 
but  slightly  into  competition  with  the  Great  Lakes  and  other 
"waterways,  were  i  .06  and  i  .03  cents  respectively.  The  follow- 
ing table, f  showing  the  wheat  rates  per  bushel  from  Chicago 
to  New  York  for  the  years  1870,  1880  and  1889,  by  water,  by 
water  and  rail  combined,  and  by  rail,  indicates  very  plainly 
how  freight  rates  have  fallen  and  how  this  movement  has 
been  led  by  the  waterways : 


By  lake  and  canal. 

By  lake  and  rail. 

By  all  rail. 

1870  .   .   . 

1880  .  .  . 
1889  .  .  . 

17.10  cents. 
12.27       " 
6.89      ' 

22.0  cents. 

15-7      " 
8.7      " 

33.3  cents. 
19.9 
15-0      " 

The  important  influence  of  the  Brie  Canal  on  freight  rates 
lias  often  been  emphasized  ;  only  a  few  facts  need  be  given 
here.  They  are  for  the  year  1891  : 

The  Erie  Canal  was  opened  in  May,  at  which  time  the  pool 
rates  on  grain  from  Buffalo  to  New  York  were  seven  and 
four- fifths  cents  per  bushel.  The  grain  rates  on  the  canal  for 
the  various  months  of  the  season  were,  May,  2.51  cents  ; 
June,  2.53  cents;  July,  2.68  cents;  August,  3.94  cents; 
September,  4.19  cents  ;  October,  4.44  cents  ;  and  November, 
4.13  cents.  The  railroad  pool  rates,  though  nominally 
unchanged,  were  not  maintained.  Mr.  Edward  Hannan, 


*For  the  year  ending  Jume  30,  1891,  they  were  .895  cents. 

t  See  "  Commercial  Policy  of  the  United  States  of  America,  1860-1890,"  by  Smith 

ni  Seligmaa. 


WATER  ROUTES  AND  RAILROAD  TARIFFS.  57 

Superintendent  of  Public  Works  of  New  York,  says  :*  * '  My 
information  on  that  subject,  which  has  been  received  from 
private  sources,  is  that  contracts  were  made  by  the  various 
railroads  to  carry  grain  in  the  months  of  June,  July  and 
August,  for  four  cents  a  bushel ;  September,  four  and  one- 
half  ;  and  October  five  cents. ' ' 

On  petition  of  the  Merchants'  Exchange,  of  Buffalo,  the 
Superintendent  of  Public  Works  kept  the  canals  of  New 
York  State  open  five  days  longer  than  the  allotted  time. 
This  shows  very  plainly  that  shippers  regard  the  canal  as  a 
freight  regulator.  When  the  canals  closed  for  the  winter,  the 
railroad  charges  again  rose  to  the  pool  rates. 

Of  course  the  Great  I^akes  and  the  Brie  Canal,  though 
very  important,  constitute  only  one  of  the  waterways  that 
compete  with  the  railroads  of  the  United  States.  On  the 
Mississippi  River  and  its  numerous  long  branches  there  is 
an  immense  traffic  setting  limits  not  only  to  the  charges  on 
freight  by  rail  carried  up  and  down  the  valley,  but  also  to 
a  large  extent  on  that  carried  out  of  the  valley.  The  grain 
rates  in  1888,  from  St.  L,ouis  to  New  York,  changed  from 
ten  cents  a  bushel  in  September  to  twenty-nine  cents  during 
December  and  January,  when  the  Mississippi  River  was  closed 
to  traffic. f 

These  great  natural  waterways  exercise  the  most  import- 
ant influence  of  any  of  the  inland  navigable  routes  of  the 
United  States  on  the  charges  which  railroads  make  ;  but  the 
smaller  streams  are  not  without  their  effect.  Whenever  the 
improvement  of  a  stream  has  given  shippers  a  choice  of 
means  of  transportation,  the  freight  rates  on  the  articles 
having  such  option  have  been  cheapened. 

One  of  the  questions  which  the  Senate  [Cullom]  Commit- 
tee on  Interstate  Commerce  sent  out  in  1885  when  making 
the  investigation  which  preceded  the  framing  of  the  bill  estab- 
lishing the  Interstate  Commerce  Commission  was  :  ' '  In 

*  See  hig  Report  on  canals  of  the  State,  1891,  page  20. 

t  Cf.  Sering,  p.  505.  "  Die  l&ndwirtschaftliche  Konkurrenz  Nord-americas  in 
•Gegemt'trt  und  Zukunft." 


58  ANNAI<S  OF  THK  AMERICAN  ACADEMY. 

making  provision  for  securing  cheap  transportation,  is  it  or 
is  it  not  important  that  the  government  should  develop  and 
maintain  a  system  of  water  routes  ?  ' '  The  answers  to  the 
question,  and  the  testimony  before  the  committee  embodied 
the  views  of  ninety  men,  most  of  whom  were  eminent  in 
railroading  and  the  transportation  business  ;  and  seventy- 
three  out  of  ninety  agreed  in  regarding  "  a  national  system 
I  of  internal  water  communication  as  the  most  certain  and  effec- 
tive method  of  regulating  railroad  rates  and  of  insuring  to 
the  people  the  advantages  of  cheap  transportation. ' '  * 

The  total  volume  of  freight  by  rail  within  the  United  States 
and  every  other  country  is,  of  course,  much  larger  than  that 
by  water.  The  reasons  why  this  is  now  so,  and  will  continue 
to  be  so,  were  noted  in  discussing  the  traffic  in  the  Rhine 
Valley.  The  waterways,  however,  can  regulate  rates  by  carry- 
ing only  a  fraction  as  much  as  the  competing  railroad  ;  and 
it  by  no  means  proves  the  inability  of  the  waterway  to  fix 
rates  to  show  that  the  volume  of  freight  passing  over  the 
railroads  is  several  times  that  on  the  competing  routes  of 
navigation.  The  rate  charged  by  the  waterway  sets  a  limit — 
not  so  low,  it  is  true,  as  the  tariff  on  the  waterway — beyond 
which  the  railroad  cannot  go  without  surrendering  its  traffic 
to  the  waterway.  The  traffic  will  bear  only  a  much  more 
limited  rate  by  rail  when  transportation  by  water  is  possible. 

A  well-informed  engineer,  yohn  I,.  Van  Ornum,)  Chief 
Topographe^  of  the  International  Boundary  Survey  which 
has  just  been  made  between  the  United  States  and  Mexico, 
says:  "It  is  the  universal  experience  in  America  that  water 
communication  tends  to  keep  down  railway  rates.  Instances 
are  not  rare  where  railways  have  carried  freight  for  the  same 
rate  that  competing  boats  have  done  until  the  boats  have 
been  sent  away  or  sold  on  account  of  lack  of  business,  and 
then  at  once  the  railways  have  raised  their  tariffs.  In  all  the 
number  of  instances  I  know  of,  when  water  navigation  has 
been  resumed,  the  competing  railways  have  been  obliged  to 

*  See  Senate  Reports,  ist  sess.,  49th  Cong.  1885-86,  vol.  ii.,  part  i,  p.  2  of  Appendix. 


WATER  ROUTES  AND  RAILROAD  TARIFFS.  59 

lower  their  rates.  \.  Herein  lies  the  great  value  of  our  water- 
ways, not  so  much  in  actual  tonnage  carried,  as  in  thejr  far- 


reaching  indirect  effect  in  forcing  down  railway  rates.  " 

The  influence  of  the  waterway  on  tariffs  is  felt  beyondjhe 
regions  immediately  bordering  the  navigable  route.  When, 
for  instance,  the  Lakes,  the  Krie  Canal  and  Hudson  River 
fix  the  rail  rates  from  Chicago  to  New  York,  they  also  ^x 
the  limits  of  charges  from  such  interior  cities  as  St.  Louis, 
Indianapolis  and  Cincinnati  to  the  East.  The  testimony 
before  the  Hepburn  Committee  was  to  the  effect  that  by 
agreement  of  the  roads  existing  at  that  time,  the  rate  from 
Chicago  to  New  York  was  taken  as  a  basis  and  the  charges 
on  slow  freight  from  Cincinnati,  Kansas  City,  Louisville,  etc., 
were  made  a  certain  percentage  of  that  basis  ;  such  a  per- 
centage, that  is  to  say,  as  would  prevent  freight  from  being 
sent  first  to  a  lake  port  and  then  shipped  east  by  water 
instead  of  being  forwarded  directly  through  by  rail,  f 

The  influence  of  the  Great  Lakes  on  rates  is  shown  by 
the  following  illustration  :  For  certain  reasons,  rates  on  coal 
from  the  Hast  are  cheaper  to  Duluth  than  to  Chicago  ;  and 
thus,  it  comes  about,  that  Duluth  dealers  can  sell  coal  as  far 
south  as  Kansas  City,  and  supply  many  cities  that  are  much 
nearer  Chicago.  As  another  illustration  may  be  mentioned, 
the  case  of  Aberdeen,  Watertown,  Huron,  and  other  Dakota 
cities,  where  wheat  rose  seven  cents  a  bushel  and  coal  fell 
two  dollars  a  ton,  when  railway  connections  with  Lake 
Superior  were  secured. 

The  influence  of  waterways  on  tariffs  by  rail  must  increase 
and  widen  with  the  future  growth  of  unity  in  freight  classi- 
fications and  charges.  The  Interstate  Commerce  Commis- 
sion, recognizing  the  fact,  that  uniformity  of  freight  classifi- 
cations among  different  companies  is  necessary  to  any  effective 

*  Quoted  from  a  letter  written  January,  1892. 

j  It  is  not  at  present  necessary  to  elaborate  this  well-known  idea  of  Albert 
Fink.  His  testimony  before  the  Hepburn  Committee,  however,  attributes  to  water- 
ways a  greater  influence  on  railroad  charges  at  the  present  time  than  I  should 
admit. 


60  ANNAI^S  OF  THE  AMERICAN  ACADEMY. 

governmental  regulation  of  freight  charges,  has  vigorously 
labored  to  induce  railroads  to  adopt  a  uniform  classification. 
The  roads  north  of  the  Ohio  and  east  of  the  Mississippi  have 
generally  adopted  the  classification  recommended  by  the 
National  Commission  ;  those  of  the  West  have  worked  out 
another  one  more  especially  fitted  to  the  condition  of  the 
territory  which  they  serve.  The  movement  is  toward  com- 
plete uniformity  throughout  the  United  States ;  indeed,  the 
American  people  will,  before  long,  insist,  not  only  that  there 
be  a  uniform  classification,  but  also,  that  the  charges  made 
by  the  railroad  companies  shall  be  fixed  throughout  their 
respective  lines  according  to  a  definite  system,  and  that  rates 
shall  be  given  fullest  publicity.  When  this  state  of  affairs 
comes  to  exist,  the  influence  of  water  competition  must  surely 
be  still  more  far-reaching.  The  principle  of  fixing  rates, 
to  which  Albert  Fink  alludes,  will  in  the  future  have  far 
wider  application  than  it  has  at  present. 

As  the  improvement  and  co-ordination  of  the  inland  water- 
ways of  the  United  States  continues,  their  control  of  freight 
rates  will  increase.  When  the  projected  improvements  of 
the  Great  I/akes  and  the  Mississippi  River  shall  have  been 
completed,  and  these  systems  of  waterways  shall  have  been 
connected  with  each  other  and  with  the  Atlantic  Ocean  by 
canals  of  adequate  dimensions,  when  the  Columbia  River 
and  other  streams  of  the  Pacific  Slope  shall  have  been 
improved  and  the  West  joined  to  the  Bast  by  means  of  the 
Nicaragua  Canal,  then  for  the  first  time  will  the  real  signific- 
ance of  our  inland  waterways  as  regulators  of  freight 
charges  be  manifest. 

To  one,  it  is  to  be  hoped,  will  interpret  the  foregoing 
cussion  to  imply  that  the  small,  ill-equipped,  antiquated 
canals  constructed  three-quarters  of  a  century  ago,  to  meet 
the  requirements  of  the  commerce  of  that  time,  can  exert  any 
important  control  over  railroad  traffic.  The  waterways  which 

ive  such  power  are  those  that  more  or  less  fully  meet  the 
dremeat  of  the  commerce  of  to-day. 


WATER  ROUTES  AND  RAILROAD  TARIFFS.  61 

Furthermore,  in  order  for  inland  waterways  to  control  the  { 
charges  on  private  railways,  they  must  be  independent  of  the 
ownership  or  control  of  the  railroads.  From  the  description 
of  the  English  canals  that  was  given  in  Chapter  III.,  it  is  not 
to  be  expected  that  the  freight  rates  by  rail  in  that  country  are 
much  influenced  by  the  waterways.  There  is,  in  fact,  but 
little  competition,  and  the  result  of  this  is  a  very  high  rate  of 
charges.  The  average  ton  mile  rate  on  the  railways  of  the 
United  Kingdom  for  heavy  traffic  is  nearly  double  the  average 
freight  earnings  of  the  railways  of  the  United  States.  This 
difference  is  to  be  accounted  for  partly  by  the  existence  in  the 
United  States  of  great  masses  of  raw  products,  which  are 
carried  long  distances  ;  but  more  by  the  fact  that  a  large  part 
of  these  products  may  be  carried  either  by  water. or -^y  rail. 

The  conclusion  to  which  the  Cullom  Committee  came  as 
the  result  of  its  investigation  in  1885;  on  the  effect  of  water 
competition  upon  railroad  charges  is' in  perfect  harmony  with 
the  position  taken  in  this  discussion.  The  report  to  the 
Senate  was  that,  ' ( the  evidence  before  the  committee 
accords  with  the  experience  of  all  nations  in  recognizing  the  | 
water  routes  as  the  most  efficient  cheapeners  and  regulators  I 
of  railway  charges.  Their  influence  is  not  confined  within 
the  limits  of  the  territory  immediately  accessible  to  water 
communication,  but  extends  further,  and  controls  railroad 
rates  at  such  remote  and  interior  points  as  have  competing 
lines  reaching  means  of  transport  by  water.  Competition 
between  railroads  sooner  or  later  leads  to  combination  or 
consolidation,  but  neither  can  prevail  to  secure  unreasonable 
rates  in  the  face  of  direct  competition  with  free  natural  or 
artificial  water  routes.  /  The  conclusion  of  the  committee  is, 
therefore,  that  natural  or  artificial  channels  of  communication 
by  water,  when  favorably  located,  adequately  improved,  and 
properly  maintained,  afford  t^e  cheapest  method  of  long  dis- 
tance transportation  now  known),  and  that  they  must  continue 
to  exercise  in  the  future,  as  they  have  invariably  exercised  in 
the  past,  an  absolutely  controlling  and  beneficially  regulating 


62  ANNAIvS   OF   THE   AMERICAN   ACADEMY. 

influence  upon  the  charges  made  upon  any  and  all  means  of 
transit." 

It  will  be  noticed  that  the  discussions  of  this  chapter  have 
had  in  view  the  relation  between  waterways  and  private  rail- 
roads. The  treatment  of  the  subject  will  not  be  complete 
until  an  analysis  has  been  made  of  the  influence  of  inland 
navigation  on  the  rates  that  may  and  must  be  charged  on 
State-owned  railways  ;  but  as  this  part  of  the  subject  fits  best 
into  the  chapter  that  is  to  follow,  it  may  be  postponed  till  the 
general  influence  of  inland  water  transportation  on  railroad 
revenues  has  been  considered. 


CHAPTER  VI. 

INFLUENCE   OF    INLAND   WATERWAYS    ON   RAILWAY 
REVENUES. 

The  relationship  between  waterways  and  railroads  as 
freight  carriers  is  but  half  expounded  by  showing  that  inland 
navigation  is  the  most  important  regulator  of  the  railroad  I 
charges  for  the  transportation  of  several  important  categories 
of  freight ;  it  still  remains  to  investigate  the  effect  which  this 
lowering  of  charges  has  on  the  net  receipts  of  the  railway 
companies.  If  net  profits  of  the  railroads  are  seriously  cut 
into  by  the  competition  of  waterways,  the  results  can  hardly 
avoid  being  injurious  to  the  best  development  of  the  means 
of  transportation  and  communication.  Although  it  is  doubtless 
true  that  in  special  cases  the  railroads,  by  means  of  mono- 
polistic powers,  secure  an  unduly  high  rate  of  gains ;  this 
can  hardly  be  said  of  the  railroad  business  in  general.  It . 
would  be  unfortunate,  both  for  the  public  and  for  the  rail- 
roads, were  the  government  or  any  other  agency  to  inaugurate 
a  policy  that  would  lessen  the  returns  on  capital  invested  in 
railroads.  It  is  to  the  interest  of  the  public  that  railroad  capital 
should  return  good  profits,  in  order  that  railway  companies  may 
continue  to  pay  their  employe's  well  for  their  work  that  the  com- 
panies may  be  able  to  improve  the  service  rendered  the  public 
and  to  extend  their  system  of  roads  to  every  nook  and  corner 
of  the  country.  The  State  can  have  no  object  in  restricting 
the  freest  development  of  the  railroad.  The  interests  of 
passengers  and  shippers  ought  to  be  guarded  by  careful 
legislation,  but  to  disregard  the  interests  of  the  railwaj^s, 
in  so  doing,  is  to  commit  as  grave  an  error  as  to  neglect  the 
the  welfare  of  those  who  ship  goods  or  travel  by  rail. 

Water  competition  is  not  ruinous  but  helpful  to  the  rail-  ; 
roads.     If  waterways  be  extended  and  their  regulative  power 
over  rail  rates  be  increased  they  will  prove  no  hindrance  to 

(63) 


64  AMHAUS  OF  TEE  AMERICAN  ACATEMY. 

the  development  of  the  railroads.  This  statement  may  seem 
somewhat  paradoxical,  but  is,  in  fact,  not  at  all  so.  The  two 
means  of  communication  are  very  different  agents  of  com- 
merce ;  they  compete  with  each  other  for  the  carriage  of 
several  kinds  of  traffic,  and  with  sufficient  force  to  influence 
strongly  the  charges  by  rail ;  but  the  -waterway  does  mare 
than  compete ;  it  both  aids  and  complements  the  railroad. 
This  feet  cannot  be  too  strongly  emphasized.  It  must  be 
kept  in  mind  throughout  the  consideration  of  the  relation  of 
waterways  and  railways.  The  two  means  of  transportation 
do  not  perform  the  same  work,  but  services  that  are  largely 
distinct  and  complementary  to  each  other. 

Not  all  the  freight  transported  by  water  would  be  moved 
by  rail  if  the  waterway  did  not  exist.  Canals,  rivers  and 
lakes  create  a  large  share  of  their  traffic.  The  cost  of  trans- 
portation determines  to  a  large  extent  the  amount  of  goods 
shipped.  Cheaper  rates  give  to  existing  categories  of  freight 
a  larger  and  wider  market,  and  introduce  into  commerce  new 
articles,  such,  for  instance,  as  sand,  stone,  straw,  fertilizers 
and  wood,  which  were  formerly  unable  to  bear  the  costs  of 
transportation.  Again,  the  waterway  creates  traffic  for  the 
railroads  as  well  as  for  itself.  It  makes  raw  materials  cheaper, 
increases  the  number  .of  those  that  are  available  for  use,  and 
thus  adds  to  the  products  of  agriculture  and  manufacture 
seeking  transportation.  The  effects  of  increasing  and 
cheapening  raw  materials  are  complex ;  cheaper  wholesale 
and  retail  prices  and  higher  wages  are  possible,  and  these 
in  turn  prepare  the  way  for  a  larger  and  more  varied  con- 
sumption of  goods.  This  means  important  additions  to  the 
shipments,  especially  of  manufactured  goods,  the  kind  of 
freight  which  from  its  nature  fells  mainly  to  the  railroads. 

The  statistics  of  the  traffic  of  the  railways  and  waterways 
at  Frankfort-on-the-Main,  before  and  after  the  canalization  of 
the  Main  from  Mayence  to  Frankfort,  show  in  a  striking 
way  that  an  increase  in  water  traffic  may  be  accompanied  by 
an  equal  or  greater  rise  in  the  traffic  of  competing  railroads. 


INLAND  WATERWAYS  AND  RAILWAY  REI 


The  improvement  of  the  Main  from  Mayence  to  Frankfort 
was  completed  at  the  close  of  1886.  The  following  table  gives 
the  tonnage  by  rail  and  by  water  for  the  three  years  before~an<l 
for  the  three  years  succeeding  the  canalization  of  the  Main.* 


Tramc  on 

water*-avs  and 
ra:lwavs. 

Tons. 

On  the 

waterwavs. 
Tons. 

Increase 
over  pre- 
vious year. 

On  the 
railways. 

jeac. 

1884    .... 

1,014,518.7 

150,513-7 

864,005 

1885    .... 

1,047,845.0 

150,805.0 

281.3 

897,040 

33.035 

1886    .... 

1,088,046.8 

155,956.8 

&I5I.8 

932,090 

35,050- 

Average  of  1 
the  3  years.  J 

1,050,136.8 

152,425.2 

897,712 

1887    .    .    .    . 

1,373,690.8 

360,062.8 

204,106.0 

1,013,628 

8i,538 

1888    .... 

1,748,733-1 

516,798.! 

156,735-3 

1,231,935 

218,307 

I889t  •    -    -    - 

1,911,758.4 

577,610.4 

60,812.3 

1,334,148 

102,213 

The  table  shows  that  the  total  increase  of  the  tonnage  of 
1888  on  that  of  the  average  for  the  years  1884-85-86  was 
698,596  tons ;  by  this  increase  the  waterways  gained  364,373 
tons,  and  the  railways  334,223  tons.  The  gain  of  1889  on 
that  of  the  average  for  the  years  1884-85-86  was  861,621.6 
tons ;  and  in  this  instance  the  railways  show  greater  gains 
than  do  the  waterways.  The  waterways  and  railways  in- 
creased their  tonnage  425,185.2  and  436,436.4  tons  respect- 
ively. The  great  gains  in  the  tonnage  of  the  railroad  since 
the  canalization  of  the  Main  as  compared  with  the  gains 
before  is  seen  if  the  yearly  increase  be  noted. 

Was  this  increase  in  traffic  due  to  other  causes  than  the 
canalization  of  the  Main,  and  could  it  have  taken  place 
without  the  waterway  ?  If  so,  the  entire  increase  in  freight 
might  have  been  secured  by  the  railroads.  According  to 
Consul  Puls  of  the  Chamber  of  Commerce  of  Frankfort,  the 
products  of  the  interior,  such  as  wood,  loam  and  building 
materials,  secured  a  greater  market  through  the  canalization 


*  Report  of  Fourth  InU 
f  The  relative  decline 


iticnal  Cc 


en  I-'.a-d  Na 


P    » 


the  increase  of  the  tonnage  both  of  waterways  and 
railroads  in  1889  was  doe  to  a  strike.    The  increase  of  the  railroads  in  1890  was. 

again  large. 


66  ANNALS  OF  THE  AMERICAN  ACADEMY. 

of  the  river.  The  industrial  activity  of  Frankfort  increased 
because  of  cheaper  raw  materials,  especially  coal.  The 
amount  of  traffic  from  Frankfort  to  the  sea  was  greatly 
I  enlarged,  by  rail  and  by  water,  and  the  railroads  profited 
both  by  a  growth  in  their  freight  and  by  an  equalization  in 
volumes  carried  up  and  down  from  the  sea  to  Frankfort. 
This  equalization  was  an  advantage  to  the  railroads,  because 
it  enabled  them  to  run  fewer  empty  wagons,  and  thus  to 
reduce  the  expenses  of  operation. 

An  important  consideration,  and  one  that  has  not  received 
due  attention,  is  that  much  of  the  freight  taken  from  the 
]  railroad  for  water  transportation  involves  little  or  no 
j  real  net  loss  to  railway  companies.  Railroads,  especially  the 
American,  are  doing  an  immense  amount  of  business  which 
brings  them  little  or  no  direct  profit.  Operating  expenses  con- 
stitute a  large  share — sixty-seven  per  cent — of  earnings,  and 
this  is  because  a  great  deal  of  bulky  freight  is  carried  at  a  rate 
so  low  that  the  costs  of  operation  often  include  ninety  per  cent 
"I  of  earnings.  Indeed,  it  is  asserted  that  coal,  coke,  stone  and 
iron  ore  are  sometimes  carried  at  a  loss  by  the  railroads  in 
order  that  by  so  doing  they  may  keep  down  the  prices  of 
crude  products  and  thus  sustain  industry  and  enlarge  the 
volume  of  higher  grades  of  traffic.*  The  operating  expenses 
on  the  German  railroads  constitute  only  fifty-five  per  cent  of 
the  gross  earnings.  Were  the  American  railways  to  give  over 
a  good  share  of  their  bulky  freight  to  the  waterways  it  would 
not  materially  reduce  their  net  profits.  Grain  is  another 
article  of  transportation  on  which  the  railroads  make  only 
small  profits.  Grain  rates  are  much  lower  in  America  than 
in  Germany,  but  local  freight  tariffs  are  much  higher,  f 
American  railroads  are  making  the  local  freights  pay  for  the 
trouble  of  handling  grain  at  low  profit. 

There  are  several  advantages  even  which  would  flow  to 
the  railroads  from  the  surrender  of  a  large  share  of  this 

*  Cf.  Thomas  P.  Roberts,  p.  10  of  "  Report  on  Waterways  and  Railways  "  to  Fifth 
International  Congress  on  Inland  Navigation. 

t  Cf.  Bering.    "  Die  landwirthschajtliche  Konkurrenz  Nord-americas! 


INLAND  WATERWAYS  AND  RAILWAY  REVENUES.     67 

bulky  low-tariff  freight.     It  would  allow  them  to  expand 
the  volume  of  fast  freight   and  increase  passenger  traffic 
and  this,  too,  by  means  of  a  proportionally  less  outlay-ef- 
capital. 

The  amount  of  travel  in  any  country,  even  more  than  the 
volume  of  freight,  is  conditioned  by  rates,  and  is  capable  of 
almost  indefinite  expansion.  The  results  of  the  zone  tariff 
in  Austria  and  Hungary  *  suggest  in  a  small  way  how  it  is 
possible  to  add  to  travel  by  reducing  rates.  A  great  reduc- 
tion in  the  local  rates  on  the  railroads  that  centre  in  London 
and  other  great  cities,  however,  could  not,  under  the  present 
conditions,  correspondingly  increase  the  travel  ;  because  of 
the  inability  of  the  railroads  to  handle  the  passengers,  f  The 
morning  and  evening  trains  are  now  crowded  ;  the  number 
of  trains  that  can  be  run  is  limited  ;  and  only  at  a  very  great 
cost  could  the  room  for  stations  and  yards  be  enlarged  suffi- 
ciently to  meet  the  requirements  of  a  greatly  increased  travel. 
Some  roads,  as  for  instance  the  Pennsylvania  within  Phila-l 
delphia,  actually  discourage  purely  local  traffic.  The  devel- 
opment of  the  waterways  leading  into  London  could  relieve 
the  railroads  of  the  burden  of  much  of  their  slow,  bulky 
freight,  enable  them  to  clear  their  tracks  for  passenger 
trains,  and  allow  them  more  track  room  for  their  passenger 
trains  in  the  city  and  permit  them  to  enlarge  their  terminal 
facilities  for  handling  passengers. 

The  expansion  not  only  of  local  but  also  of  long  distance 
passenger  traffic  depends  upon  freeing  the  railroads  of  some 
of  its  bulky  freight.  The  trunk  lines  of  the  United  States 
are  now  over-crowded ;  they  refused  to  make  a  large  reduction 
in  passenger  rates  to  the  World's  Fair  because  they  said  that, 
if  they  did,  they  would  be  unable  to  handle  the  traffic  that 
would  result.  When  the  New  York  Central  proposed  to  put 
on  twenty-hour  trains  between  New  York  and  Chicago,  it 
was  opposed  by  the  other  trunk  lines.  As  an  official  of  the 

*See  ANNALS  OF  THE  AMERICAN  ACADEMY,  vol.  i.,  pp.  103,  462. 
t  See  Acworth.    Contemporary  Review,  j8of. 


68  ANNAI^S  OF  THE  AMERICAN  ACADEMY. 

Pennsylvania  road  said,  ' '  such  a  train  presents  no  difficulties 
to  the  Pennsylvania  Railroad  Company  from  a  mechanical 
standpoint,  nor  from  the  standpoint  of  the  road's  condition. 
But  as  regards  running  such  a  train  in  its  relation  to  our 
other  business  it  would  be  prejudicial  to  those  interests. 
The  volume  of  freight  and  passenger  business  over  the  Penn- 
sylvania is  simply  enormous,  and  the  running  of  such  a  train 
would  seriously  interfere  with  its  movement,  especially  at 
the  present  time,  when  the  road  from  New  York  to  Chicago 
is  crowded  with  business."  *  The  coal  lines  of  the  East  are 
crowded  to  such  an  extent  that  passenger  trains  are  often 
delayed,  and  shippers  rendered  unable  to  secure  the  prompt 
delivery  of  freight.  Under  present  conditions  the  large 
increase  of  local  and  distance  traffic  which  it  is  possible  for 
cheapness  to  produce  would  involve  greater  outlays  of  capital 
than  the  increased  traffic  receipts  would  justify,  but  were  the 
railroads  relieved  of  a  good  share  of  their  bulky  freight,  they 
might,  with  very  small  outlay  of  capital,  greatly  develop  the 
passenger  business. 

The  increase  and  extension  of  waterways  aid  the  railroads 
through  the  increased  travel  which  results  from  building  up 
manufactures,  developing  trade,  and  promoting  the  growth 
of  large  cities.  Take,  for  instance,  the  influence  of  that 
greatest  of  all  inland  waterways,  the  Great  L,akes,  on  the 
growth  of  the  passenger  traffic  in  the  States  bordering  the 
lakes.  It  has  been,  in  large  part,  the  improvement  of  the 
harbors  and  channels  of  the  Great  Lakes  that  has  caused  the 
phenomenal  growth  of  Duluth,  Milwaukee,  Chicago,  Detroit, 
Toledo,  Cleveland,  Buffalo,  etc.  The  railroads  have  not  only 
aided  the  growth  of  these  cities,  but  have  in  turn  been  greatly 
benefited  through  the  development  which  has  come  to  them 
by  means  of  the  improvements  of  the  water  route.  Indeed, 
the  most  important  railroad  systems  of  the  United  States  are 
those  which  share  in  the  commerce  of  the  region  round  about 
the  Great  Lakes. 

*  Public  Ledger,  Philadelphia  May  u,  1893. 


INLAND  WATERWAYS  AND  RAILWAY  REVENUES.     69 

This  fact  reveals  the  true  relation  of  the  two  agents  of; 
commerce.  They  are  complements  of  each  other.  When 
the  waterway  and  railroad  are  perpendicular,  they  feed  one 
another  ;  when  they  run  parallel,  competition  results  in  recip- 
rocal development  of  each — at  least,  will  so  result  when  the 
waterway  corresponds,  as  to  dimensions  and  equipment,  to 
the  commercial  needs  of  the  present,  and  provides  for  the 
transportation  of  goods  through  comparatively  long  distances. 
The  Rhine  Valley,  as  well  as  our  own  lake  region,  furnishes 
an  illustration  of  this  truth.  The  statistics  of  the  traffic 
during  the  last  forty  years  on  the  Rhine  River  and  on  the 
railroads  of  the  Rhine  Valley,  show  that  the  growth  of  the 
transportation  on  each  has  been  about  equally  rapid. 
'  *  Neither  of  the  two  means  of  communication  has  prevented j 
the  development  of  the  other. ' '  * 

Though  the  railroads  and  waterways  ought  to  be  competi- 
tive means  of  transportation,  they  ought  not  to  antagonize 
each  other.  Only  the  benefits  which  the  railroad  receives 
from  the  waterway  have  been  cited  ;  but  the  aid  is  reciprocal. 
The  well-located  and  well-constructed  waterway  need  not  fear 
co-ordination  with  the  railway,  indeed,  the  attainment  of 
the  highest  degree  of  usefulness  is  otherwise  impossible. 
The  railroad  must  be  present  to  aid  in  distributing  the  finished 
products  manufactured  from  the  articles  transported  by  water,  • 
or  there  will  be  but  small  freight  by  water.  Not  only  these 
manufactured  goods  but  such  articles  of  consumption  as  pass 
directly  from  the  waterway  to  the  consumers  must  be  distrib- 
uted by  the  railway,  for  water  routes  are  few  in  number  and 
reach,  directly,  but  a  very  limited  number  of  consumers.  The 
general  relation  of  waterways  and  railroads,  as  collectors  and 
distributers  respectively,  is  shown  by  the  shipments  into  and 
out  of  Paris  by  water  and  by  rail  in  1890.  The  waterways 
brought  to  Paris  4,037,719  tons,  and  the  railroads  5,826,548 
tons,  the  percentage  carried  by  each  being  41  per  cent  and 

*  Van  der  Borght,  p.  25.    "  Report  on  Railways  and  Waterways  "  to  Fifth  Inter- 
national Congress  on  Inland  Navigation. 


yo  ANNAI^S  OF  THE;  AMERICAN  ACADEMY. 

59  per  cent  respectively  ;  but  of  the  freight  from  Paris, 
which,  of  course,  consisted  mostly  of  manufactured  articles, 
the  waterways  carried  only  953,834  tons,  while  the  railroads 
transported  2, 335, 252  tons,  the  percentages  being  29  per  cent 
and  71  per  cent  respectively.*  This  took  place,  however,  with 
very  poor  connections  at  the  ports  between  the  waterways  and 
the  railroads,  so  poor,  indeed,  as  to  greatly  limit  trans-ship- 
ment. The  close  connection  of  the  waterway  with  the  rail- 
road, so  that  shipment  from  one  to  the  other  may  be  easily 
accomplished  is  hardly  less  essential  to  the  waterway's  best 
use  than  the  improvement  of  the  way  itself.  The  people  of 
Philadelphia  have  recognized  this  fact.  A  belt  line  railroad 
is  being  built  by  which  the  railroads  entering  the  city  may 
each  reach  the  wharves  throughout  the  length  of  the  Delaware 
and  Schuylkill  water-fronts.  The  advantage  of  this  will  be 
great,  alike  to  railroads  and  inland  waterways  centering  at 
Philadelphia ;  vessels  from  the  inland  as  well  as  from  the 
ocean  will  be  able  to  exchange  freight  with  the  railways. 

This  discussion  of  the  complementary  character  of  the  two 
means  of  transportation,  prepares  the  way  for  the  considera- 
tion of  the  relation  of  inland  waterways  to  State-owned  rail- 
roads, of  the  influence  of  the  former  on  the  tariffs  and  revenues 
of  the  latter.  All  the  advantages  which  have  been  cited 
above  as  accruing  to  private  roads  from  the  development  of 
routes  of  inland  navigation  flow  to  State  railroads,  and  in  a 
higher  degree,  because  of  the  possibility  of  a  more  perfect 
co-ordination  of  the  two  means  of  transportation.  As  in  the 
case  of  private  so  with  State  railroads,  the  waterway  can 
relieve  them  of  the  traffic  which  is  as  well  or  better  adapted 
to  carriage  by  water,  and  leave  the  road  free  to  expand  its 
fast  freight  business  and  passenger  traffic  without  making  the 
large  investments  of  capital  that  would  be  otherwise  necessary 
in  order  to  widen  the  roadbed,  increase  the  number  of  tracks, 
and  enlarge  terminal  yards  and  stations.  The  existence  of 

*  See  Delaunay— Belleville,   p.  27.    Report  to   Fifth  International  Congress  on 
Inland  Navigation. 


INLAND  WATERWAYS  AND  RAILWAY  REVENUES.      71 

both  means  of  transportation  would  thus  make  possible  an  ' 
economical  division  of  traffic,  that  would  give  to  each  way  the  I 
carriage  of  those  things  which  it  was  best  fitted  to  transport 
under  the  conditions  existing  at  the  time  the  freight  was 
offered  for  shipment.     This  has  to  a  large  extent  taken  place 
in  the  Rhine  Valley,  and  will  do  so  more  in  the  future,  as  the 
waterways  are  developed  and  their  co-ordination  with  the 
railroads  is  made  more  complete. 

The  division  of  freight  between  the  two  means  of  transpor- 
tation is  not,  of  course,  into  two  distinct  classes — one  class 
going  by  water  and  one  by  rail — for  each  agent  carries  many 
kinds  of  articles  that  the  other  does.  Still  the  waterway 
reduces  the  ratio  which  [the  bulkier  goods  would  otherwise 
bear  to  the  more  profitable  classes  of  rail  freight,  and  this  is 
to  the  advantage  of  the  net  returns  on  the  capital  invested  in 
railroads. 

The  State,  furthermore,  by  extending  inland  waterways, 
would  save  not  alone  in  amount  of  necessary  investment  in  ' 
railroads,  but  also  in  expenses  of  operation  relatively  to  gross 
receipts.  As  was  seen,  the  costs  of  operation  are  a  very  large 
share  of  the  gross  receipts  from  the  freight  that  would  mostly 
go  to  the  waterway,  and  the  waterway  would  enable  the  rail-  | 
road  to  develop  a  kind  of  traffic  where  net  receipts  above  costs  I 
of  operation  are  larger.  Thus  it  comes  about  that  both  burdens 
of  expense  which  the  railroads  must  meet,  interest  on  invest- 
ment and  cost  of  operating,  are  rendered  lighter  when  the 
waterways  co-operate  with  the  railroads  in  the  transportation 
of  freight.  The  development  of  inland  navigation  has  also 
been  shown  to  increase  rather  than  to  lessen  the  volume  of 
traffic  by  rail.  Waterways,  therefore,  enable  the  State  to 
reduce  tariffs  on  its  railroads  and  still  receive  as  large  a  net 
return  on  their  business  as  would  be  possible  without  the 
traffic  by  water. 

Because  of  the  fact  that  the  inland  waterways  and  the  State 
railways  of  Prussia  are  under  the  control  of  different  officials 
there  has  been  a  good  deal  of  rivalry  between  the  two  means 


72  ANNANS  OF  THK  AMERICAN  ACADEMY. 

of  communication.  The  managers  of  the  railroads  have  been 
anxious  to  show  a  surplus,  and  have  opposed  the  extension 
of  inland  waterways.  Of  late  this  opposition  seems  to  have 
weakened.  Prussia  has  entered  upon  the  construction  of 
canals,  and  the  connection  of  the  two  means  of  transportation 
has  been  made  closer,  without  detriment  either  to  the  traffic 
or  net  receipts  of  the  railroads.  The  Prussian  Minister  of 
Public  Works,  Thielen,  said,  in  1891:  "The  subsequent 
development  of  the  railway  service  must  go  on  simultaneously 
with  the  improvement  of  the  navigable  ways.  The  navigable 
way  is  the  sister,  equal  by  birth,  of  the  railway." 

The  commercial  position  of  the  waterway,  and  its  influ- 
ence on  the  tariffs  and  revenues  of  the  railroad  are  well  stated 
by  the  following  resolution  of  the  Fourth  International  Con- 
gress on  Inland  Navigation  :  ' '  The  existence  and  devel- 
opment together  of  railways  and  waterways  is  desirable, 
first,  because  these  two  means  of  transport  are  the  comple- 
ments of  each  other  and  ought  to  contribute  each  accord- 
ing to  its  special  merits  to  the  public  good  ;  second,  because 
viewed  broadly,  the  industrial  and  commercial  development 
which  will  result  from  the  improvement  of  the  means  of 
communcation  must  in  the  end  profit  both  railways  and 
waterways." 


CHAPTER  VII. 

UNDER  WHAT  CONDITIONS  AND  TO  WHAT  EXTENT  CANAI^ 
CAN  COMPETE  WITH  RAILROADS  IN  THE  FUTURE. 

Mention  was  made  in  a  previous  connection  of  the  neces- 
sity for  singling  out  the  canal  from  other  inland  waterways 
for  the  purposes  of  special  study.  In  this  chapter  improved 
rivers  and  lakes  are  dropped  from  discussion,  in  order  thereby 
to  make  a  more  critical  analysis  of  the  commercial  position 
of  the  purely  artificial  waterway  and  of  its  relation  to  the 
railway.  Herein  lies  the  most  difficult  problem  of  inland 
navigation,  the  one  concerning  which  there  is  the  greatest 
dispute.  It  is,  however,  with  no  desire  to  enter  the  arena  of 
disputation,  but  with  the  purpose  of  setting  forth  in  an 
analytical  way  the  most  recent  and  salient  facts  about  the 
canal  that  this  chapter  is  written. 

In  entering  upon  this  analysis  it  is  necessary  to  bear  in 
-mind  that  there  are  at  least  three  very  distinct  kinds  of  canals. 
There  are  those  with  capacity  and  equipment  for  floating  the, 
ships  that  ply  the  ocean  and  such  large  interior  lakes  as 
make  up  the  chain  along  our  northern  boundary  ;  then  there 
are  canals  whose  construction,  breadth  of  way  and  locks  | 
make  them  navigable  by  the  large  steamers  of  shallow  draft 
that  run  on  the  large  rivers  ;  finally,  there  is  the  barge  canal, 
the  waterway  which  the  word  canal  first  calls  up  in  thej 
minds  of  most  persons.  This  third  kind  requires  a  depth 
equal  to  or  greater  than  is  necessary  for  river  boats,  but 
its  other  dimensions  may  be  smaller.  The  traction  of  canal 
barges  has  been,  and  is  even  to-day,  generally  horse  power  ; 
that,  however,  was  not  a  necessary  condition  of  barge  canal 
traffic  ;  in  the  future  steam,  or  perhaps  electricity,  will  in  the 
case  of  the  waterway  as  elsewhere  be  the  prevailing  motive 

(73) 


74  ANNAIvS   OF  THK   AMERICAN   ACADEMY. 

power.  It  is  obvious  that  these  three  kinds  of  canals  fulfill 
different  services  to  commerce  and  do  not  each  stand  in  the 
same  relation  to  other  means  of  transportation. 

Concerning  the  power  of  the  canal  large  enough  to  float 
the  ocean  ships  and  deep-draught  lake  vessels  to  compete  with 
the  railroads  when  once  it  is  completed  there  is  no  doubt,  pro- 
vided the  waterway  is  in  the  line  of  an  important  and  growing 
commerce.  Whether  or  not  realizable  tolls  will  return  good 
interest  on  invested  capital  depends,  of  course,  on  the  circum- 
stances of  its  construction  and  the  traffic  that  it  secures.  On 
this  ground  alone  capitalists  decide  whether  they  will  put 
money  into  any  enterprise.  States  or  cities  will  not  neglect 
this  consideration,  but  will  also  act  in  large  part  on  other 
motives,  and  in  the  case  of  such  great  works  as  the  construc- 
tion of  these  largest-sized  canals  the  interests  affected  are  so 
varied  and  the  benefits  so  far-reaching  that  the  general  welfare 
of  society  makes  it  desirable  that  the  State,  either  in  its  local 
or  national  organization,  should  insist  that  considerations 
other  than  the  single  one  of  profits  on  capital  invested  should 
decide  whether  or  not  a  work  should  be  executed. 

Against  the  benefits  which  will  result  from  the  construction 
of  a  canal  or  a  railroad  must  be  measured  the  costs  of  putting 
the  work  in  condition  for  use  and  the  subsequent  expenses 
of  operation  and  maintenance.  What  the  benefits  of  each 
way  really  are  must  be  kept  clearly  in  mind.  The  preceding 
pages  have  shown  that  the  rail  and  water  routes  perform 
different  kinds  of  service,  not  only  as  carriers,  but  as  de- 
velopers of  traffic,  and  have  emphasized  the  fact  that  the 
importance  of  the  waterway  and  its  relation  to  the  railroad 
are  not  to  be  discovered  by  merely  comparing  the  tonnage 
statistics  of  the  two. 

The  cost  of  constructing  a  canal  depends  on  the  character 
of  the  country  through  which  it  is  run  and  on  the  dimen- 
sions and  equipment  that  it  is  given  ;  while  these  last  must 
be  determined  by  the  use  to  which  the  waterway  is  to  be 
put.  If  the  canal  is  to  extend  the  commerce  of  the  ocean 


AND  RAILROADS  IN  THE  FUTURE.          75 

or  the  largest  lakes,  it  must  be  deep  enough  to  allow  ocean 
vessels  and  large  lake  ships  to  navigate  it,  and  be  large 
enough  to  handle  the  traffic  to  be  moved.  Such  a  waterway 
may  sometimes  cost  a  very,  large  sum,  and  at  the  same  time 
justify  the  expenditure.  (The  Manchester  Canal  will  cost  < 
about  $2,000,000  a  mile.  This  is,  of  course,  several  times 
what  the  best  equipped  four- tracked  railroad  would  cost ;  but  J 
the  waterway  will  not  only  be  capable  of  performing  as  great 
a  service  as  such  a  railroad,  and  at  a  far  cheaper  rate,  but 
will  do  for  the  commerce  of  Manchester  much  that  no  rail- 
road could  perform,  "^it  will  make  Manchester  a  seaporu 
Likewise,  in  the  casfe-ef  a  canal  from  the  Great  L,akes  to  the 
ocean,  or  from  the  Mississippi  to  the  Great  Lakes,  it  is  quite 
useless  to  compare  its  costs  with  the  expense  of  constructing 
a  railroad.  Such  canals  render  a  larger  service,  and  a  dif- 
ferent one,  than  the  railroad. 

Whether  the  construction  of  a  canal,  be  it  large  or  small, 
is  warranted  or  not,  must  be  decided  by  considering  the 
various  benefits  private  and  public  that  will  flow  from  the 
investment  of  the  capital  necessary  to  execute  the  work.  The 
costs  can  only  be  determined  by  careful  estimates  of  the  work 
actually  required  for  the  execution  of  the  particular  waterway. 
But  little  is  to  be  gained  by  investigating  the  costs  of  existing 
canals,  they  are  in  most  cases  too  small  and  too  inadequately 
equipped.  Future  canals  must  be  larger  and  be  more  substan- 
tially built,  and  will,  therefore,  cost  much  more  than  former 
ones.*  Perhaps  the  only  really  helpful  general  principle  that 
can  be  laid  down  is  this :  The  larger  canals  are  the  more  i 
profitable  investments  they  will  be,  provided  they  are  used  to 
their  entire  capacity.  Of  course,  this  principle  is  usually  true 
of  the  railroad  business,  the  exceptions  arising  in  the  case  of 
those  lines,  so  located,  that  they  can  increase  the  number  of 

*The  Prussian  consulting  architect  Michaelis,  in  1882,  submitted  estimates  of  the 
costs  required  to  construct  four  canals,  having  a  total  length  of  354  miles,  and 
capable  of  floating  bdatToh  500  tons  burden.  The  outlay  per  mile  according  to  his 
estimate  would  he  $84,162]  This  is  surprisingly  low;  and  cannot  be  taken  as 
applicable  to  couAjrie^ja^re  hilly  than  Prussia. 


7 


76  ANNAI£  OF  THE  AMERICAN' ACADEMY. 

their  tracks  only  by  exceptionally  expensive  works  of  con- 
struction, or  can  acquire  larger  terminal  facilities  only  at 
great  costs.  These  conditions  could  hardly  obtain  with  a 
waterway.  If  it  is  possible  to  build  a  waterway  at  all  of 
moderate  depth  and  size,  its  construction  with  larger  dimen- 
sions would  nearly  always  be  possible.  Furthermore,  the 
traffic-bearing  capacity  which  would  result  to  the  waterway 
from  giving  the  canal  the  larger  size,  would  be  proportionally 
greater  per  dollar  of  investment  than  the  traffic-bearing 
capacity  which  would  result  from  money  spent  in  construct- 
ing the  waterway  with  small  proportions.  The  difference 
between  the  costs  of  a  small  canal  and  a  large  one  lies  chiefly 
in  expenses  of  excavation  ;  and  of  course,  this  is  only  one  of 
the  items  of  cost.  The  other  items,  locks,  protection  of 
banks,  construction  of  wharves,  etc.,  increase  in  cost  at  a 
diminishing  rate  as  the  canal  is  enlarged  in  its  carrying 
capacity.*  As  will  be  shown  later,  traction  and  other 
expenses  necessary  to  navigation  decrease  rapidly  with  the 
size  and  depth  of  the  waterway. 

As  regards  the  relative  costs  of  maintaining  an  important 
railroad  and  a  waterway  after  they  have  been  constructed,  the 
canal  has  the  advantage  over  the  railroad.  Those  canals 
of  the  present  time  whose  construction  permits  of  only  slow 
navigation  by  horse  traction  are  maintained  at  much  less 
expense  per  mile  than  the  railroads.  The  simplicity  of  the 
construction  of  the  canal,  and  the  small  amount  of  wear  and 
tear  caused  by  the  slow  moving  traffic  make  the  expenses 
connected  with  maintaining  a  waterway  small.  Steam  or 
electric  traction,  and  higher  rate  of  navigating  will  necessi- 
tate a  more  solid  construction  of  the  waterways,  and  will 
doubtless  add  somewhat  to  the  costs  of  maintenance.  The 
true  basis  for  comparing  the  relative  costs  of  maintenance  of 
railways  and  canals  consists  in  contrasting  the  expenses  for 
maintenance  incident  to  the  transportation  of  equal  volumes 

*See  inter  alia  "  Canals  and  Their  Economic  Relation  to  Transportation."    I,ewis 
M.  Haupt.     Papers  of  American  Economic  Ass' n.    Vol.  v.,  No.  3. 


CANAI^S  AND  RAILROADS  IN  THK  FUTURE.          77 

of  traffic.  Granting  the  two  ways  to  be  of  equally  good 
construction  the  waterway  must  suffer  less  injury  than  the 
railroad  from  the  friction  incident  to  equal  volumes  of  traffic. 

likewise  the  costs  of  moving  freight  by  water  are  less  than  J 
by  rail.  Here  there  are  two  items  to  be  compared,  costs  of 
traction,  and  expenses  due  to  floating  and  rolling  stock.  The 
fundamental  reason  why  traction  by  water  is  less  than  by  rail 
is  sufficiently  obvious.  A  horse  can  draw  at  the  rate  of  three 
feet  a  second  a  load  of  about  3200  pounds  on  a  good  wagon 
road  ;  of  30,000  pounds  on  a  rail  track,  and  from  120,000  to 
200,000  pounds  on  the  water.  Where  boats  having  steam 
engines  as  efficient  as  the  railroad  locomotive,  are  used  in 
moving  freight,  as  is  the  case  on  the  ocean  and  the  Great 
Lakes,  the  great  economy  of  hauling  by  water  becomes  mani- 
fest. Boats  carrying  2700  tons  are  run  from  Duluth  to 
Buffalo  in  three  and  a  half  days  at  an  average  per  diem  cost 
of  $120.  Taking  the  distance  to  be  about  1000  miles  the 
cost  per  ton  mile  is  only  .015  cents.  I/et  this  be  compared 
with  the  expenses  of  '  *  conducting  transportation  * '  (exclu- 
sive of  maintenance  of  way,  structures,  and  equipment), 
assignable  to  freight  traffic  on  the  Pennsylvania  Railroad, 
which  are  about  1 7  cents,  or  ten  times  as  large  as  on  the 
lake  steamers,  and  the  economy  of  water  transportation 
under  favorable  conditions  becomes  evident. 

The  relation  of  net  to  ' '  dead ' '  load  on  boats  and  trains  is 
another  reason  for  the  cheaper  transportation  by  water.  The 
net  load  of  a  ship  is  usually  three  or  four  times  the  weight 
of  the  boat,  the  larger  the  vessel  the  greater  the  ratio. 
The  net  load  of  a  car  is  from  one  and  a  half  to  twice  the 
weight  of  the  car.  This  difference  is  increased  by  the  fact 
that  cars  are  generally  not  so  fully  loaded  as  are  boats.  The 
wagons  used  in  the  general  merchandise  traffic  of  Bngland  are 
seldom  loaded  to  a  third  of  their  capacity.  The  railroads 
find  that  promptness  of  delivery  makes  it  impossible  to  fill 
the  wagons.  The  water  traffic,  on  the  other  hand  is  not  fast 
freight  and  boats  can  be  fully  loaded.  On  the  fourteen 


ANNAI<S  OF  THE  AMERICAN  ACADEMY. 


principal  waterways  of.  Germany  in  1887,  eighty  per  cent  of 
the  boat  loads  were  full  cargoes.  * 

In  the  matter  of  cost  and  maintenance  of  equipment  for 
moving  freight,  also,  the  waterway  has  a  decided  advantage 
over  the  railroad.  A  ship  costs  about  one-fifth  as  much  as  a 
train,  or  as  trains  of  cars  of  equal  carrying  capacity,  whereas, 
the  life  of  the  ship  is  longer  and  the  expenses  of  maintenance 
less.  The  canal  barge  of  500  tons  burden  has  as  great 
capacity  as  a  good- sized  train,  and  three  times  that  of 
the  average  train  of  the  United  States.  The  enormous 
trains  of  1 200  and  1 500  tons  load  run  on  the  trunk  lines  are 
quite  exceptional. 

The  average  costs  of  moving  a  ton  of  freight  a  mile  on  the 
railroads  of  the  United  States  (exclusive  of  costs  of  main- 
tenance of  way  and  structures),  was  .522  cents  in  1890  ;  the 
cost  on  the  Pennsylvania  was  .390  cents  ;  on  the  New  York 
Central  and  Hudson  River,  .460  cents;  on  the  Brie,  .368 
cents;  on  the  Reading,  .391  cents.  Over  against  these 
figures  may  be  placed  the  average  freight  rate  of  .135  cents, 
charged  per  ton  mile  on  the  traffic  carried  on  the  Great 
Lakes,  a  free  natural  waterway.  Of  course,  it  is  not  to  be 
forgotten,  that  the  costs  of  transportation  on  the  Great  Lakes 
are  lower  than  they  are,  or  can  be,  in  canals.  The  average 
grain  rates,  in  1891,  from  Buffalo  to  New  York  by  way  of 
the  Erie  Canal  and  Hudson  River,  were  3.49  cents  a  bushel, 
or  about  .233  cents  per  ton  mile.  The  distance  from  Albany 
to  New  York  is  covered  by  the  Hudson  River,  where,  of 
course,  the  cost  of  transportation  is  cheaper  than  by  canal  ; 
but  the  Brie  Canal  is  far  from  being  such  a  waterway  as 
those  of  the  future  will  be.  Most  towing  is  still  by  animals, 
and  boats  have  a  capacity  of  only  240  tons  burden,  and  are 
raised  and  lowered  by  comparatively  small  locks.  It  is  safe 
to  say,  that  the  cost  of  transporting  heavy  freight  on  a  well- 
equipped  American  canal,  with  boats  of  500  tons  burden 

*  J.  Stephen  Jeans.  Report  to  the  Fourth  International  Congress  on  Inland 
Navigation. 


CANAI^S  AND  RAILROADS  IN  THK  FUTURE.  79 

propelled  by  steam,  will  be  less  rather  than  more  than  .233 
cents  per  ton  mile — the  grain  rates  between  Buffalo  and  New 
York. 

While  it  is  true  that  the  costs  of  transportation  on  canals 
must  be  more  than  on  large  lakes  and  rivers,  the  difference 
will  be  less  in  the  future  than  at  present.  Indeed,  when  the 
waterway  is  an  integral  part  of  a  system  of  natural  water- 
courses, and  has  dimensions  large  enough  to  allow  the  boats 
that  ply  the  natural  waterways  to  navigate  it,  and  when  its 
banks  are  so  protected  as  to  make  possible  the  use  of  steam- 
motor  power  (and  these  are  the  conditions  that  future  canals 
mttst  meet) ,  then  costs  of  moving  freight  on  them  will  not  be 
much  higher  than  on  the  natural  waterways. 

No  American  engineers  have  made  detailed  calculations 
for  the  purpose  of  comparing  how  much  railroad  companies 
and  owners  of  private  canals  must  charge  per  ton  mile  of 
freight  in  order  to  obtain  a  fair  remuneration  on  invested 
capital.  Work  of  this  kind  has  been  done  by  the  German 
engineers,  Bellingrath  and  Symphner.  They  figured  out 
carefully  the  cost  of  transportation  by  barge  canals  and  by 
rail,  including  every  item,  the  interest  on  all  capital  invested, 
the  expenses  for  maintenance  and  management  of  ways,  and 
for  maintenance  of  floating  and  rolling  stock,  cost  of  haul- 
ing and  profits  of  ship  owners,  but  their  calculations  were 
confined  to  German  roads  and  canals,  and  were  made  ten 
years  ago.  They  do  not  throw  much  light  on  the  relations 
of  canals  and  railroads  in  another  country  as  different  from 
Germany  as  America.  Industrial  conditions  also  have 
changed  not  a  little  during  the  past  decade.  The  calcula- 
tions were  not  without  value  in  as  much  as  they  show  that 
ten  years  ago  in  Germany,  barge  canals  capable  of  floating 
boats  of  350  to  500  tons  burden  could  carry  bulky  freight 
in  large  quantities  much  cheaper  than  the  railroads.* 

*  Cf.   Bellingrath  "  Studien  uber  Bau  und  Betrieb  fines  deutschcn  Kanalnetzes." 
Symphner  "  Transportkosten  auf  Eisenbahnen  und  Kanalen." 
August  Meitzen  "Die  Kanalfrage  in  Preussen"  in  Schmoller's  Jahrbuch  fur 
Gesetzgcbung  und  Statistik.    8  b.   1884. 


8o  ANNAI^S  OF  THE  AMERICAN  ACADEMY. 

It  is  to  be  borne  in  mind  that  in  making  these  comparisons 
between  the  costs  of  rail  and  water  transportation  the 
two  ways  are  necessarily  considered  as  performing  the  same 
service.  This  is,  of  course,  one  way  to  view  the  relation  of 
the  two  means  of  communication.  This  shows  that  there  is 
a  large  amount  of  freight  that  can  be  shipped  more  cheaply 
by  water.  But  from  what  was  said  in  Chapters  V.  and  VI. 
it  is  evident  that  this  is  but  one  side  of  the  question.  The 
relation  of  the  waterway  to  the  railroad  and  to  transporta- 
tion and  trade  is  more  complex  than  that  would  imply.  The 
fact  has,  perhaps,  been  sufficiently  enforced,  but  it  can  hardly 
be  too  strongly  emphasized,  that  the  waterway  does  more 
than  effect  a  saving  of  a  few  mills  a  ton  on  a  part  of  the 
bulky  freight  shipped.  The  waterway  has  far-reaching 
/  indirect  effects  on  industry,  it  is  the  complement  of  the  rail- 
j  road,  and  neither  means  of  transportation  can  reach  its  highest 
usefulness  to  commerce  without  the  presence  of  the  other. 

The  canal  may  be  said  to  be  at  present  in  a  state  of  transi- 
tion to  a  condition  of  greater  efficiency.  Important  improve- 
ments are  being  made  whose  effect  can  be  little  less  than  a 
revolution  of  the  canal  as  a  means  of  transportation.  Doubt- 
less the  change  that  first  suggests  itself  as  necessary  in  the 
equipment  of  the  canals  is  the  substitution  of  steam  for  horses 
as  the  motor  power  for  the  traction  of  boats.  ' '  The  competi- 
tion between  canal  and  railway  in  this  country  never,  in  any 
fair  sense,  resulted  in  a  victory  of  land  carriage  over  water 
carriage  ;  the  victory  was  that  of  the  steam  engine  over  horse 
flesh,  and  very  poor  horse  flesh  at  that."  *  Up  to  the  present 
time  most  inland  canals  have  been  constructed  for  a  small 
barge  traffic,  and  the  prevailing  power  used  for  moving  boats 
has  been  horses.  The  reason  why  steam  has  not  been  substi- 
tuted is  that  the  construction  neither  of  the  waterway  nor  of 
the  barge  permitted  it  to  be  done.  The  width  and  depth  of 
the  old  canals  are  not  great  enough  ;  the  banks  are  entirely 

•  Roberts,  p.  5.  Report  on  "  Respective  Uses  of  the  Waterways  and  Railways  of 
the  United  States  "  to  the  Fifth  International  Congress  on  Inland  Navigation. 


CANALS  AND  RAILROADS  IN  THK  FUTURE.  Si 

unprotected,  or  only  partially  secured  against  the  attacks  of 
waves  generated  by  boats ;  the  locks  are  too  small  and  too- 
numerous  ;  and  the  blunt-ended,  piston-like  form  of  the  old  . 
style  of  boats  is  such  as  to  admit  only  of  the  slow  motion  of 
horse  towing  without  piling  up  a  cushion  of  water  ahead  of 
the  barge.     The  general  use  of  steam  as  a  locomotive  power 
on  canals  cannot  take  place  until  radical  changes  have  been  j 
made  both  in  the  waterway  and  in  the  boats  used  on  them. 

How  to  protect  the  banks  of  canals  in  the  best  and 
cheapest  way  against  the  action  of  the  waves  is  receiving 
much  attention  from  engineers.  In  the  case  of  the  maritime- 
Nord-Ost-See  Canal  masonry  work  of  different  kinds,  de- 
pending on  the  material  that  is  most  accessible,  is  being 
used  at  a  cost  of  about  $20,000  a  current  mile  of  the  canal. 
The  costs  in  this  canal  are  large,  because  much  of  the  stone 
and  brick  has  to  be  brought  from  a  distance.  The  protection, 
of  the  banks  of  smaller  canals  is  less  expensive,  and  prob- 
ably woodwork,  either  of  the  character  now  used  in  the 
Netherlands  and  France  or  in  some  other  form,  can  be 
employed  successfully  and  at  a  less  expense.  * 

The  economy  of  steam  traction  even  on  canals  of  small 
dimension  is  beyond  question.  Mr.  Hannan,  Superintendent 
of  Public  Works  of  New  York  State,  says  that  whatever 
profit  was  derived  from  the  carrying  trade  on  the  Erie  Canal 
in  1891  was  made  by  those  who  operated  steam  boats.  The 
results  of  Symphner's  calculations  were  that  steam  power  is 
sixteen  and  two-thirds  per  cent  cheaper  than  well -organized 
animal  traction  for  barges  of  350  and  500  tons'  burden.  The 
larger  the  dimensions  of  the  canals  and  the  capacity  of  the 
boats  the  greater  will  be  the  economy  of  steam  traction. 

The  best  form  of  traction  on  a  barge  canal  such  as  the 
Erie  is  still  an  undecided  question.  Several  kinds  have 
been  successfully  tried  on  different  European  canals.  The 

*  For  a  discussion  of  methods  of  consolidating  canal  banks  consult  the  papers  on 
the  subject  submitted  by  Schlichting,  Peslin,  Van  der  Sleyden,  Hoerschelmann 
to  the  Fifth  International  Congress  on  Inland  Navigation. . 


82  ANNALS  OF  THE  AMERICAN  ACADEMY. 

navigation  of  the  canal  presents  very  different  conditions  from 
those  that  obtain  on  rivers.  There  the  kind  of  a  steamer  to 
be  used  depends  on  the  depth  of  the  river  and  the  swiftness 
of  the  current.  In  the  lower  reaches  of  a  river  the  screw 
steamer  is  best ;  in  the  middle  courses,  where  the  current  is 
more  rapid  and  the  possible  draft  of  the  boat  small,  the 
paddle  steamer  is  the  most  efficient ;  where  the  current  of 
the  river  is  very  rapid  the  chain  steamer  can  be  used  most 
successfully.  The  chain  steamer  propels  itself  by  means  of 
a  chain  lying  on  the  bed  of  the  stream.  The  chain  passes 
over  the  boat  and  about  a  drum  which  is  revolved  by  an 
engine  on  the  boat.  Such  chains  have  been  laid  in  many  of 
the  rivers  of  Europe,  the  Seine,  the  Rhine,  the  Neckar,  the 
Elbe  and  the  Oder  and  others. 

The  difficulties  connected  with  a  shallow  draft  of  water 
and  with  overcoming  currents  do  not  exist  in  canal  navigation; 
here  the  problem  is  chiefly  how  to  prevent  the  boats  from 
creating  waves  destructive  of  the  canal.  Screw  and  paddle 
steamers  are  out  of  the  question  on  canals  with  unprotected 
banks,  and  even  those  which  have  protected  ones  suffer  more 
or  less  from  the  waves  of  steamers.  Of  chain  steamers  there 
are  two  kinds,  the  one  described  above,  and  the  one  which  pro- 
pels itself  by  means  of  an  endless  chain  which  the  boat  carries 
along.  As  the  endless  chain  is  being  passed  over  the  boat 
by  the  engine  on  the  boat  a  part  of  the  chain  rests  on  the  bed 
of  the  waterway,  the  weight  of  the  chain  being  sufficient  to 
enable  the  steamer  to  drive  itself  forward.  The  chain  steamer 
avoids  the  creation  of  waves  other  than  those  due  to  its  own 
motion.  It  affords  a  simple  and  economical  power,  but  the 
breaking  of  the  chain  and  the  delay  caused  by  the  passing  of 
boats  cause  a  good  deal  of  hindrance,  and  render  the  chain 
steamer  somewhat  unsatisfactory.  Furthermore  the  most 
economical  use  of  the  chain  steamer,  the  same  as  other  steam- 
ers depends  on  the  possibility  of  increasing  the  speed  above 
that  attained  by  animal  traction,  and  this  necessitates  canals  of 
considerable  size  with  protected  banks.  This  last  condition 


CANALS  AND  RAILROADS  IN  THE  FUTURE.          83 

holds  equally  true  as  regards  the  hauling  of  boats  from 
the  banks  by  locomotives  or  by  means  of  a  moving  cable. 
Both  of  these  methods  of  hauling  from  the  bank  have  been 
experimentally  tried  with  fair  success.  Of  course  the  object 
here  also  has  been  to  apply  steam  power  in  such  a  way  as  to 
do  least  damage  to  the  unprotected  or  poorly  protected  canal 
banks,  and,  this  being  the  case,  it  is  probable  that,  as  canals 
are  built  with  banks  well  secured  against  the  action  of  the 
waves,  this  makeshift  method  will  be  abandoned  for  the 
screw  steamer,  the  one  most  used  in  all  waters  but  those  of 
shallow  rivers.  The  probability  of  this  taking  place  is 
increased  by  the  fact  that  in  the  future  the  distinction  between 
barge  canals  and  those  connecting  segregated  lakes  and 
rivers  will  doubtless  grow  less  and  canals  become  more 
and  more  integral  parts  of  improved  natural  waterways. 
Lake  and  river  ship  canals  must,  of  course,  be  constructed 
with  a  depth  and  breadth  of  way  and  a  solidity  of  banks  that 
will  permit  lake  and  river  steamers  to  navigate  them. 

There  is  a  possibility  that  barge  traffic  on  canals  will  be 
able  to  make  use  of  electricity  as  a  motor  with  more  economy 
than  steam.  There  is  no  reason  why  the  trolley  system 
should  not  be  applied  to  the  hauling  of  canal  boats,  the 
same  as  street  cars,  provided,  the  boats  can  be  run  at 
frequent  and  regular  intervals  as  the  cars  are.  It  has  been 
suggested  that  a  trolley  line  be  run  along  the  Erie  Canal, 
where  these  necessary  conditions  exist.  The  scheme  could 
probably  be  carried  out  and  result  in  an  economy  in  costs 
for  haulage,  and  produce  an  increase  of  traffic.  The  discus- 
sion of  electricity,  however,  as  a  motor  for  barge  canals,  and 
the  influence  it  would  have  on  commerce,  would  better  be 
postponed  till  some  experiments  have  been  made. 

Mention  has  been  made  several  times  in  this  monograph, 
of  the  necessity  for  constructing  canals  larger  than  those  of 
the  past  have  been.  The  economy  in  traction  and  costs  of 
transportation,  generally  deserves  further  emphasis.  In  the 
first  place,  attention  may  be  recalled  to  the  fact  that,  the 


84  ANNALS  OF  THE  AMERICAN  ACADEMY. 

larger  the  boat  the  greater  the  net,  as  compared  to  the  dead, 
load  to  be  hauled.  Second,  the  cost  of  -hauling  the  boat, 
exclusive  of  cargo,  increases  much  slower  than  the  tonnage 
capacity.  For  instance,  the  charges  for  hauling  boats  on 
the  Saale  River,  Germany,  between  the  mouth  of  the  stream 
and  the  City  of  Halle,  are  twelve  cents  a  kilometre  for  boats 
of  thirty  tons,  and  only  thirty-four  cents — less  than  three  times 
as  much — for  boats  of  300  tons,  ten  times  as  large.  Third, 
the  total  costs  of  transportation  decrease  rapidly  with  the 
increase  in  the  size  of  the  cargo.  Professor  L,ewis  M.  Haupt 
lays  down  the  law  that,  ' '  the  cost  of  movement  on  water  is 
inversely  proportional  to  the  draft  of  the  vessel. ' '  *  He  bases 
his  law  on  the  following  facts  :  The  cost  of  carrying  goods 
on  the  Erie  Canal  in  boats  of  less  than  five  feet  draft,  is 
3.00  f  mills  a  ton  mile  ;  on  the  Great  Lakes  in  boats  drawing 
fourteen  to  sixteen  feet,  the  costs  are  i .  2  mills  ;  on  the  ocean 
in  vShip  drawing  twenty-five  feet,  .5  mills.  The  reciprocals 
of  the  drafts  of  the  vessels — 1,  xV,  & — are  to  each  other  in 
the  ratio  i,  .33,  .2  ;  and  the  freight  charges — 3,  1.2,  .5 — are 
in  the  ratio  i,  .4,  .17 — the  two  ratios  being  nearly  the  same. 
The  construction  of  larger  canals  entails  the  enlargement 
and  improvement  of  locks.  How  to  overcome  differences  in 
level  has  always  been  a  difficult  problem  in  canal  construc- 
tion and  navigation.  Before  the  invention  of  the  chamber 
lock — probably  about  the  beginning  of  the  sixteenth  century 
— artificial  waterways  were  possible  in  only  a  few  places. 
The  lock  continues  to  be  the  method  of  overcoming  differ- 
ences in  level  that  is  usually  made  use  of,  and  though  it 
has  been  much  improved,  as  will  be  seen,  it  still  offers  a  great 
drawback  to  commerce  on  the  canal,  one  that  men  are  willing 
to  make  great  sacrifices  to  avoid.  The  lock,  especially  such 

*  "  Canals  and  their  Economic  Relation  to  Transportation."  p.  65,  Papers  of  the 
American  Economic  Association,  vol.  v,  No.  3.  Many  conclusions  of  this  work  (as 
is  the  case  generally  with  Professor  Haupt's  writings)  are  based  on  insufficient 
data.  The  force  of  his  arguments  is  often  weakened  by  claiming  to  much  for 
them. 

fThis  does  not  deny  the  fact  that  there  are  boats  running,  which  draw  six  feet 
of  water  and  carry  for  less  than  three  mills. 


CANAI.S  AND  RAILROADS  IN  THE  FUTURE.  85 

as  has  been  constructed  in  the  paston  barge  canals,  imposes 
serious  limitations  on  the  efficiency  of  the  canal.  They  raise 
and  lower  vessels  only  a  few  feet — eight  feet,  ten  inches,  ki 
the  case  of  the  Erie  Canal — thus  they  require  numerous  lock- 
ings to  raise  or  lower  a  boat  through  large  differences  of  level. 
This,  of  course,  takes  much  time.  The  navigation  routes  of 
England,  independent  of  the  railroads,  have  on  an  average  a 
lock  to  every  mile  and  a  half  of  their  length ;  those  canals 
owned  by  the  railroads  average  a  lock  to  every  one  and  a 
fifth  miles.  More  than  a  third  of  the  time  spent  in  navigating 
English  canals  is  spent  in  passing  the  locks.  The  only  way 
by  which  this  is  to  be  avoided  is  to  reduce  the  number  of 
locks  and  concentrate  them  at  fewer  points.  This  would 
both  reduce  the  time  spent  in  locking  boats  and  increase  the 
distances  of  unimpeded  navigation.  The  locking  of  a  boat, 
further,  requires  the  use  of  a  good  deal  of  water,  even 
though  the  waste  has  been  much  reduced  by  various  devices, 
and  makes  the  "  feeding"  of  some  inland  canals  a  serious 
problem. 

In  order  to  avoid  the  hindrances  which  locks  place  upon 
the  navigation  of  barge  canals  attempts  have  been  made  to 
substitute  some  better  way  of  raising  and  lowering  ships  ;  and 
with  the  result  that  two  new  methods  have  been  successfully 
employed  in  a  few  places  to  raise  and  lower  barges.  These 
two  new  methods  are  the  perpendicular  hydraulic  lifts,  and 
inclined  planes. 

By  the  hydraulic  lift,  boats  are  raised  and  lowered  in  cais- 
sons. Each  lift  has  two  caissons,  each  resting  on  one  or  more 
hydraulic  rams.  The  two  caissons  rise  and  fall  alternately, 
the  motive  power  being  supplied  by  having  more  water  in  the 
descending  caisson  than  in  the  ascending  one.  The  inclined 
plane  is  an  arrangement  whereby  the  canal  boat  is  carried  on 
a  carriage  up  or  down  an  inclined  plane  from  one  level  to 
another.  The  hydraulic  lift  and  inclined  plane  succeed  in 
avoiding  the  objections  which  obtain  against  the  lock.  The 
differences  in  level  overcome  by  them  are  several  times  as 


86  ANNAI<S  OF  THE  AMERICAN  ACADEMY. 

great  as  by  the  lock.  The  amount  of  water  wasted  when  the 
lift  or  inclined  plane  is  used  is  only  a  fraction  as  much  as 
when  the  lock  is  employed  ;  and  the  ascents  or  descents  from 
one  level  to  another  may  be  concentrated  at  a  few  points  in 
the  canal,  instead  of  being  scattered  throughout  its  entire 
course. 

Both  the  hydraulic  lift  and  the  inclined  plane  have  been 
successfully  constructed  and  operated.  The  inclined  plane 
on  the  Shropshire  Canal,  of  England,  effects  a  perpendicular 
rise  of  213  feet ;  there  are,  also,  inclined  planes  on  the  Bute 
Canal,  of  England.  The  first  perpendicular  lift  constructed 
for  raising  and  lowering  canal  boats  was  the  one  at  Anderton, 
England,  by  which  boats  of  100  tons  cargo  are  taken  from 
the  Trent  and  Mersey  Canal  and  raised  fifty  feet  into  the 
Weaver  River.  There  is  a  lift  at  Fontinette,  France,  which 
raises  and  lowers  vessels  of  350  tons  forty-four  feet.  On  the 
Belgian  Canal  du  Centre,  near  L,ouviere,  there  are,  within  a 
distance  of  seven  kilometres,  four  lifts  which  together  over- 
come a  fall  of  222  feet.  In  Germany,  five  small  inclined 
planes  have  been  constructed  on  the  canals  ;  but  no  lifts  have 
as  yet  been  built.  "It  is  probable,  however,  that  hydraulic 
lifts  will  be  included  in  the  plans  for  the  canals  that  have  been 
projected  from  L,iibeck  to  I,auenburg,  and  from  Dortmund 
through  Minden  to  Magdeburg. ' '  *  There  is  one  canal  in 
the  United  States,  the  Morris  and  Essex  in  New  Jersey,  on 
which  an  inclined  plane  is  in  use.  No  lifts  have  been 
constructed  on  any  canals  of  the  United  States  ;  but  the  con- 
struction of  two  is  contemplated  to  aid  in  overcoming  the 
obstructions  to  navigation  at  the  Dalles  in  the  Columbia 
River,  Oregon. 

Of  the  two  arrangements  for  raising  and  lowering  canal 
barges,  the  hydraulic  lift  and  the  inclined  plane,  the  latter 
has  more  merits  ;  for  there  is  practically  no  limit  to  the  differ- 
ence in  level  it  can  overcome.  Again,  the  inclined  plane 
costs  less,  and  is  not  so  complex  a  structure.  Neither  the 

*  Quoted  from  a  letter  written  by  Bellingrath,  February  10,  1892. 


CANALS  AND  RAILROADS  IN  THK  FUTURE.          87 

lift  nor  the  plane  however  will  displace  the  use  of  the  lock  to 
any  great  extent  even  for  raising  and  lowering  barges.  The 
large  sized  barges  that  will  come  into  use  on  the  larger  canals 
of  the  future,  would  require  a  lift  of  very  expensive  construc- 
tion to  raise  and  lower  them.  The  lift  will  probably  never 
be  used  to  any  great  extent  to  raise  and  lower  ocean  and  lake 
steamers.  The  inclined  plane  will  probably  be  used  where 
barges  and  river  boats  are  to  be  carried  through  great  differ- 
erences  of  level,  and  in  other  places  where  canals  have  a 
small  supply  of  water.  Except  in  these  very  unusual  cases 
the  lock  will  be  used ;  indeed,  given  a  sufficient  supply  of 
water,  the  locks  as  now  improved  are  able  to  raise  and  lower 
vessels  through  long  distances.  Some  of  the  locks  on  the 
Nicaragua  Canal  are  to  have  a  lift  of  45  feet.  They  are  all  80 
feet  wide  and  656  feet  long.  The  locks  as  designed  by  Col. 
Blackman  for  the  canal  were  to  be  700  feet  long,  100  feet 
wide,  and  effect  lifts  from  50  to  100  feet.* 

The  usefulness  of  the  canal,  and  the  importance  of  its 
service  as  compared  with  those  rendered  by  the  railroad, 
depend  to  no  small  degree  on  the  way  in  which  it  is  adminis- 
tered. The  waterway  should  be  kept  open  to  navigation  as 
much  as  possible,  and  all  closings  on  account  of  the  climate, 
or  for  making  repairs  should  be  reduced  to  a  minimum.  In 
regions  where  the  frost  closes  navigation  for  a  part  of  the 
year,  repairs  should  be  made  during  the  winter.  In  many 
instances  the  improvement  in  harbor  facilities,  the  enlarge- 
ment of  wharfage  space,  and  the  use  of  machinery  for  loading 
and  unloading  boats,  will  render  an  important  aid  to  inland 
navigation.  A  boat  on  the  Elbe  spends  seventy-five  of  the 
three  hundred  days  of  the  season  of  navigation  in  motion, 
and  the  other  two  hundred  and  twenty-five  days  in  the  docks. 
As  a  contrast  to  this  may  be  mentioned  the  steamship  ' '  Mon- 
ola  "  on  the  Great  L,akes,  which  spent,  in  1891,  175  days  sail- 
ing and  only  47  lying  in  port.  Most  of  all  ought  the  harbors 
to  provide  better  facilities  for  reshipment  from  railroad  to 

*  See  Jeans  "  Waterways  and  Water  Transportation."    pp.  419-420. 


SB  ANNALS  OF  THE  AMERICAN  ACADEMY. 

waterway  and  vice  versa.  The  best  possible  co-ordination 
ought  to  exist  between  the  two  means  of  transportation  ;  it 
is  only  thus  that  they  can  fulfill  their  functions  as  complements 
of  each  other. 

So  far  in  this  discussion  of  the  relation  of  the  canal  to  the 

railroad  and  of  the  improvements  now  being  made  in  the 
waterway,  and  which  will  increase  its  commercial  importance 
and  its  power  to  develop  side  by  side  with  the  railroad,  the 
canal  has  been  regarded  merely  as  an  agent  of  commerce  ;  but 

-  it  often  performs  other  services  by  draining  or  irrigating  the 
country  through  which  it  passes.  Much  of  Schleswick  and 
Holland  have  been  converted  by  canals  from  swamps  into 
fertile  fields.  The  canals  and  river  improvements  of  Spain 
liave  aided  in  irrigation.  As  the  regulation  and  improve- 
ment of  the  Po,  Rhine  and  other  rivers  have  had  in  mind 
Ihe  prevention  of  floods,  so  may  the  canals  keep  in  view 
the  agricultural  interests  of  the  country  through  which  they 
run. 

On  the  basis  ot  the  considerations  elaborated  in  this  and 
the  preceding  chapters,  I  feel  convinced  that  the  canal  is  cap- 
able of  rendering  industry  and  commerce  important  services. 

/  The  maritime  and  lake-ship  canals  rank  first  in  the  value  of 
their  aid  ;  those  extending  or  connecting  large  rivers,  and 
so  constructed  as  to  form  an  integral  part  of  the  navigation 
on  those  streams  come  second  in  importance.  As  has  been 
stated  above,  the  barge  canal,  as  distinct  from  the  two  other 

\  classes,  will  be  constructed  less  frequently  in  the  future  than 
it  has  been  in  the  past ;  but  the  usefulness  of  such  waterways 
under  conditions  modified  to  suit  the  needs  oi  the  present  is 
not  a  thing  of  the  past. 

While  this  chapter  was  being  written,  the  author  received 
a  letter  from  Ewald  Bellingrath,  of  Dresden,  to  whom  refer- 
ence has  been  made  in  the  foregoing  pages.  The  opinions 
of  ' '  the  best  informed  man  on  German  inland  commerce  ' '  * 
are  :  "  The  power  of  the  canal  to  compete  with  the  railroad 

*  Quoted  from  Symphner. 


CANAI.S  AND  RAILROADS  IN  THE  FUTURE.          89 

in  regions  where  the  difficulties  are  not  too  great  is  beyond 
doubt  if,  ( i )  a  sufficient  quantity  of  freight  exists,  or  can  be 
secured,  for  transportation  ;  (2)  the  canal  be  constructed  with 
not  too  small  proportions,  ships  not  under  500  tons ;  (3)  there 
be  a  good  service  to  supply  steam  traction." 

Such  are  the  conditions  which  must  exist  before  a  barge 
canal  can  become  a  valuable  means  of  transportation.  A  large 
amount  of  freight,  to  be  shipped  a  comparatively  long  dis- 
tance ;  dimensions  of  waterway  and  locks  large  enough,  at 
least,  to  permit  barges  to  carry  500  tons,  a  load  about  three 
times  the  average  trainload  in  the  United  States,  and 
about  half  the  load  of  the  heaviest  trains ;  such  a  con- 
struction of  the  banks  of  the  canal  as  to  make  possible 
the  use  of  steam  traction.  With  these  conditions  fulfilled, 
the  usefulness  of  the  barge  canal  is  assured.  To  whom  its 
construction,  and  the  construction  of  the  other  two  kinds  of 
canals  should  fall,  depends  on  circumstances  which  will  be 
considered  in  the  next  chapter. 


CHAPTER   VIII. 

THE   CONSTRUCTION  OF    CANALS   AND    THE    IMPROVEMENT 

OF  NATURAL  INLAND  WATERWAYS  BY  THE  STATE 

AND   BY   CORPORATIONS. 

In  the  foregoing  chapters,  the  character  and  extent  of  the 
services  now  being  rendered  by  the  inland  waterways  have 
been  indicated,  and  the  present  imperfections  of  the  canal, 
and  the  possibility  and  probability  of  their  being  overcome 
in  the  near  future,  have  been  discussed.  It  has  been  further 
shown  that  under  certain  conditions  the  canal  cannot  onl}r 
compete  with  the  railway,  but  can  perform  some  sendees 
much  better.  The  present  chapter  has  to  do  with  the  ques- 
tion who  shall  improve  natural  waterways  and  construct 
canals.  Shall  the  State  pay  for  and  carry  out  these  improve- 
ments; or  shall  it  leave  them  wholly  or  in  part  to  private 
enterprise  ? 

In  Germany  the  State  carries  on  the  work ;  the  use  of 
rivers  is  free,  that  of  canals  on  payment  of  low  tolls.  The 
extension  and  improvement  of  inland  waterways  in  France 
have  in  the  past  been  at  times  individual  and  sometimes 
State  enterprises ;  the  State  has,  however,  bought  up  most  all 
private  waterways,  and  since  1880,  has  maintained  them  at 
public  expense  for  the  free  use  of  all.  The  waterways  of  Italy 
are,  with  one  exception,  State  property,  and  not  subject  to 
tolls.  The  inland  navigation  of  Belgium  has  been  improved 
and  extended  by  the  State,  and  tolls  are  now  collected.  Rus- 
sian waterways  are  improved  and  maintained  entirely  at  the 
cost  of  the  State.  Works  in  England  have  been  executed 
by  corporations,  or  "trusts,"  sometimes  with  State  aid, 
oftener  with  municipal  help,  and  frequently  with  neither. 
The  act  of  Parliament  of  1888  extends  the  State's  control  of 
tariffs  and  tolls.  The  inland  navigable  ways  of  the  United 
States  have  been  extended  by  individuals  and  corporations, 

(90) 


CONSTRUCTION  AND  IMPROVEMENT  OF  WATERWAYS.   91 

by  the  States,  and  by  the  Federal  Government.  Natural 
waterways  and  canals  under  the  control  of  the  United  States 
are  free.  The  same  is  true  of  the  canals  owned  by  New 
York  ;  but  on  other  canals  tolls  are  levied.  The  discussion 
of  the  relation  of  the  State  to  waterways  involves  two  con- 
siderations :  Who  shall  execute  the  work  of  improving 
waterways,  and  how  shall  these  improvements  be  paid  for  ? 
The  questions  will  be  answered  in  turn,  in  this  and  the 
following  chapter. 

In  but  few  questions  do  all  the  advantages  rest  with  one 
side.  In  the  case  of  waterway  improvements  there  are  some 
arguments  in  favor  of  private  enterprise.  They  are  the  fol- 
lowing :  ( i )  The  State  avoids  a  heavy  expenditure  of  money; 
her  taxes  may  be  lighter,  and  the  demands  of  her  budget  may 
be  more  easily  met.  (2)  The  State  is  spared  an  important 
increase  in  her  civil  service  force,  and  this  is  a  consideration 
not  to  be  disregarded,  especially  by  the  United  States.  The 
functions  of  our  Federal  Government  are  increasing  and  must 
necessarily  continue  to  do  so  rapidly  with  the  development 
of  our  administrative  powers,  and  we  cannot  help  regarding 
with  concern  any  increase  in  our  civil  list,  until  we  see  civil 
service  reform  drawing  on  apace.  (3)  The  State  should 
leave  to  the  individual  whatever  he  can  do  equally  well.  If 
there  are  improvements  of  waterways  which  individuals  or 
corporations  can  make  equally  as  well  as  the  State,  and  with 
as  much  benefit  to  the  public,  the  State  should  not  undertake 
the  work.  The  extensive  assumption  by  the  German  States » 
of  industrial  functions  which  other  countries  leave  to  indi- 
viduals, has  had  a  marked  effect  in  checking  and  weakening 
the  capability  of  individual  initiative.  German  capitalists 
have  not  the  daring  and  invention  in  undertaking  and  devel- 
oping large  busines?  enterprises  that  those  of  England  and 
America  have.  The  Germans  have  grown  to  feel  in  a  large 
degree  dependent  on  State  initiative  in  industry,  a  fact  which 
explains  in  part  why  Germany  is  the  land  where  socialism 
most  nourishes.  (4)  Closely  related  to  this  is  a  fourth 


92  ANNANS  OF  THE  AMERICAN  ACADEMY. 

argument  in  favor  of  individual  enterprise.  The  management 
of  private  business  is  less  bureaucratic,  and  where  competition 
exists,  tends  to  adapt  itself  more  to  commercial  wants. 
Competitive  enterprises  bid  for  trade,  and  seek  to  meet  its 
wishes,  while  a  bureaucracy  is  less  flexible  and  compels  busi- 
ness to  adapt  itself  to  administrative  regulations.  Too  much, 
however,  must  not  be  made  of  this  fact.  A  strong  private 
monopoly  may  be  quite  as  unyielding  and  regardless  of  public 
needs  as  a  bureaucracy.  (5)  In  leaving  these  works  to 
private  companies,  the  State  avoids  all  danger  of  taxing  one 
section  of  the  country  to  favor  another.  The  United  States 
is  a  large  country,  and  business  interests  are  many  and 
diversified.  Not  all  sections  of  the  country  have  exactly 
similar  interests.  The  fact,  however,  is  constantly  becoming 
less  important.  With  the  increase  in  population,  the  develop- 
ment of  industry,  the  growth  in  commerce  due  to  the  improve- 
ment and  extension  of  means  of  communication,  the  develop- 
ment of  banking  and  systems  of  credit,  the  solidarity  of  our 
social  and  industrial  life  grows  ever  stronger.  The  circles  of 

I  influence  exerted  by  an  improvement  in  navigation  extend 
wider  with  the  increase  in  the  solidarity  of  business  interests. 
(6)  It  is  often  urged  in  favor  of  private  enterprise  that  it  is 
/much  more  certain  than  the  State  to  commence  only  those 
/  works  which  promise  a  return  on  capital  invested — that  there 
will  be  greater  economy  in  investment  and  expenditure. 
This  argument,  however,  cannot  bear  up  against  criticism. 
If  the  proneness  of  men  to  speculate  be  considered  and  the 
very  small  percentage  of  all  business  men  which  the  success- 
ful ones  comprise,  be  taken  into  consideration,  it  becomes 
impossible  to  maintain  that  the  improvement  of  water- 
ways by  individuals  instead  of  b)'  the  State  will  be  any 
safeguard  against  waste  of  capital.  Indeed,  experience  in 
/  this  matter  is  favorable  to  State  enterprise.  The  private 
capital  was  injudiciously  invested  quite  as  freely  as  public 
funds  during  '  *  the  canal  mania  ' '  on  works  that  have  since 
become  of  little  use  or  have  been  abandoned.  It  was  not 


CONSTRUCTION  AND  IMPROVEMENT  OF  WATERWAYS.    93 

the  French  government   which   wasted   its   money  on  the 
Panama  project. 

The  reasons  in  favor  of  State,  as  compared  with  private,, 
improvement  and  extension  of  waterways  are  :  (i)  The  fact 
that  water  routes  are  from  their  nature  public  ways,  and 
whether  the  works  on  them  be  executed  by  the  State  or  by 
corporations,  the  State  ought  to  maintain  the  public  character 
of  the  waterway.  This  demands  State  supervision  to  the 
extent  of  fixing  dimensions  of  canals  and  river  channels,  of 
controlling  tolls  and  tariffs,  and  of  laying  down  rules  in 
accordance  with  which  the  waterways  shall  be  administered. 
The  State  can  much  more  easily  and  surely  maintain  the 
water  routes  as  public  highways  by  improving  and  extend- 
ing them  herself.  The  experience  of  England,  where  nearly  i 
all  these  works  have  been  private  enterprises,  has,  as  has 
already  been  shown  in  another  connection,  been  anything  but 
satisfactory.  The  English  canals  have  already  been  dis- 
cussed, but  their  condition  may,  at  this  point,  be  referred  to 
again  with  profit.  It  will  be  best  to  quote  the  words  of  an 
Englishman  :  *  ' '  Take  as  a  case  in  point  the  transport  of 
iron  between  London  and  Liverpool,  or  vice  versa.  In  this 
freight  the  trader  would  have  to  deal  with  no  fewer  than  six 
canal  administrations  to  Preston  Brook,  within  twenty  miles 
of  Liverpool,  where  it  would  have  to  be  transhipped  and 
carried  for  the  remainder  of  the  distance  on  the  Bridgewater 
Canal.  Until  recently,  when  the  Bridgewater  Canal  became 
the  property  of  the  Manchester  Ship  Canal  Company,  they 
charged  75.  6d.  per  ton  for  this  service,  or  more  than  2s.  4^. 
per  ton  more  than  the  other  six  companies  charged  for  a 
distance  of  220^  miles.  The  canal  charges — between  the 
two  greatest  ports  in  the  world — was  rather  over  a  penny  per 
ton  per  mile.  This  is  only  an  example  of  the  general 
character  of  the  system  as  now  organized,  and  it  is  not 
to  be  wondered  at  if,  under  such  circumstances,  traders  are 

*  Jeans.     Article  in   Report  of  the    Fourth    International   Congress  on   Inland 
Navigation. 


94  ANNAI<S  OF  THE  AMERICAN  ACADKMY. 

disposed  to  give  canals  a  very  wide  berth.  Singular  as  it  may 
appear,  an  ocean  steamer  often  conveys  cargo  across  the 
Atlantic,  a  distance  over  3000  miles,  for  a  rate  less  by  one- 
half  than  the  charges  by  water  transport  by  canal  between 
London  and  Liverpool,  a  distance  of  only  240  miles,  or 
about  one-thirteenth  of  the  distance. ' ' 

(2)  The  services,  other  than  those  of  navigation,  which  are 
rendered  by  improved  waterways,  will  be  better  secured  in 
the  case  of  State  enterprise.     The  improvement  of  the  Po 
River  system  of  Italy  has  had  for  its  object  the  prevention 
of  the  inundations  in   the  central  and  lower  parts  of  the 
valley;    and  the  State,  by  studying  the  character   of  the 
streams  of  the  Lombard  provinces,  has  improved  them  in 
such  a  way  as  to  prevent,  to  a  great  extent,  inundations  in 
the  provinces  of  Venice  and  Farara.     The  improvements  of 

\  the  Rhine,  the  Mississippi  and  other  great  rivers  should  aim 
\  more  than  they  do  at  present  to  control  the  oft-recurring 
i  floods. 

(3)  Again,  the  improvement  and  extension  of  the  most 
important  inland  waterways  will  progress  more  slowly  than 
they  ought,  if  left  to  individual  enterprise,  and  commerce 
will  thereby  greatly  suffer.     It  is  doubtful  whether  private 
companies  would  have  undertaken  the  improvement  of  the 
Mississippi  River  or  the  Great  Lakes ;  and  certainly  they 
would  not  have  begun  the  work  so  soon  nor  have  executed  it 
so  thoroughly  as  has  the  United  States  government.     Indeed, 
such  works  are  not  adapted  to  individual  enterprise.     Not 
so  much  because  of  the  large  amount  of  capital  required,  for 
to-day  capitalists  are  not  awed  by  the  magnitude  of  any 
undertaking ;    but   more  because  of  the   complicated   legal 
relations  that  would  arise  were  a  private  company  to  assume 
the  work  of  improving  such  a  navigable  highway  as  the 
Great  Lakes,  for  instance,  over  which  several  States  and  two 
nations  exercise  dominion.     The  improvement  of  the  Mis- 
sissippi system  would  involve  equal  difficulties.     The  fact, 
iowever,  that  militates  most  against   private  enterprise  in 


CONSTRUCTION  AND  IMPROVEMENT  OF  WATERWAYS.  95 

these  particular  instances  is  that  both  of  the  great  systems 
of  waterways  ought  to  be  improved  together  according  to  a 
common  plan.     This  is  something  that  the  United  States  has_ 
not  yet  done,  but  ought  to  do.     The  improvement  of  the  j 
Mississippi  River  system  and  the  Great  Lakes  ought  to  be ; 
under  one  and  the  same  commission. 

But  were  the  character  of  the  work  to  be  executed  such 
that  it  could  be  successfully  carried  out  by  private  corpora- 
tions, no  country  would  think  of  giving  over  the  improve- 
ment of  the  Mississippi  River  to  a  private  company.  To  do 
this  would  place  the  commerce  of  a  great  natural  waterway, 
in  fact  of  a  great  river  system,  draining  the  vast  region 
between  the  Allegheny  and  the  Rocky  Mountain  ranges, 
under  the  influence,  if  not  control  of  a  few  individuals.  The 
same  considerations  would  hold  concerning  the  Great  Lakes. 
Such  a  case  is  of  course  intrinsically  very  different  from  the 
improvement  of  a  short  Knglish  river  on  which  only  a  few 
cities  are  located.  Some  canals  also  are  much  more  clearly 
the  work  of  the  government  than  are  others.  One  would 
hardly  think  of  giving  over  the  control  of  a  lake-ship  canal 
from  the  great  lakes  to  the  ocean  to  a  private  company,  a 
canal  which  would  be  the  key  to  the  commerce  of  the  entire 
northern  part  of  the  United  States.  The  objection  to  the 
construction  of  a  canal  from  St.  Paul  to  Lake  Superior  by  a 
private  corporation  or  municipality  is  much  less  ;  such  a 
canal  would  by  no  means  be  of  merely  local  importance ; 
but  it  is  much  more  so  than  the  one  from  the  Great  Lakes 
to  the  ocean  would  be.  If  it  be  granted  that  the  Manchester 
Ship  Canal  may  rightly  be  left  by  the  English  government  to 
the  City  of  Manchester  and  the  Manchester  Ship  Canal 
Company,  they  being  subject  to  careful  legal  restrictions,  that 
is  by  no  means  evidence  that  a  trans-national  canal  leading 
from  London  to  Liverpool  through  Northampton,  Birming- 
ham, Newcastle,  and  other  large  cities,  should  be  controlled 
by  a  private  company,  not  to  say  several  companies,  as  is  at 
present  unfortunately  the  case. 


96  ANNALS  OF  THE  AMERICAN  ACADEMY. 

(4)  The  very  forces  that  tend  to  cause  the  improvement  of 
waterways  to  be  executed  by  private  persons,  may  furnish 
reasons  why  such  works  ought  to  be  executed  by  the  State. 
In  England  where  the  individual  feels  quite  independent  of 
the  State,  and  views  with  suspicion  any  State  interference 
with  industry,  the  improvement  of  inland  navigation  has 
naturally  been  the  work  of  corporations.  In  Germany,  on 
the  other  hand,  the  relation  of  the  State  to  industry  is  differ- 
ent. Individuals  look  to  the  State  for  the  execution  of  these 
works.  The  thought  finds  characteristic  expression  in  this 
sentence  taken  from  report  of  the  Prussian  ministry  in  1882  : 
' '  In  view  of  past  experience,  there  is  hardly  any.  doubt  that 
the  State,  in  case  any  new  project  is  to  be  carried  out,  must 
assume  the  construction  at  public  expense. ' ' 

Whether  the  State  or  corporations  will  most  naturally 
undertake  the  improvement  of  inland  navigation  depends, 
as  Professor  Lujo  Brentano,  of  Munich,  says,  "Upon  a 
country's  past  political  development  and  the  power  of 
individual  initiative  which  that  development  has  called 
forth.  Where  initiative  power  is  strong,  waterways  will 
be  constructed  without  the  State ;  but  where  centuries  of. 
State  intervention  have  killed  all  private  initiative,  foreign 
capitalists,  if  any,  are  the  ones  that  do  the  work.  The  gas 
works  and  water  works  of  Germany  may  be  cited  as  an 
example  of  this. ' '  The  policy  that  ought  to  be  adopted  in 
regard  to  the  improvement  of  waterways  depends,  according 
to  Professor  Brentano,  "upon  present  political  conditions. 
Where  the  State  is  everything,  the  construction  of  waterways 
by  private  persons  is  better,  otherwise,  the  party  which  has 
the  control  of  the  State  in  its  hands,  may  manage  the  inland 
navigation  in  an  absolute  way.  Where  individuals  are 
everything  construction  by  the  State  is  better,  in  order 
thereby  to  break  the  monopoly  of  private  persons. ' ' 

*  These  two  statements  are  a  free  translation  of  the  following  note  made  by 
Professor  Brentano  during  a  conversation  the  author  had  with  him: 

"  Die  Frage  ob  Staat  oder  Aktil  ist  nicht  bios  eine  Frage  gegenwartiger  oko- 
nomischer  Zweckmassigkeit.  Sie  hangt  ab  :  (i)  Von  vergangener  politischer  Ent- 


CONSTRUCTION  AND  IMPROVEMENT  OF  WATERWAYS.    97 

The  half  of  this  argument  which  advocates  State  works  in 
countries  where  private  monoplies  have  overwhelming  power 
is  strong  ;  the  other  half  seems  less  so.  The  sacrifice  thai 
Germany  would  make,  were  she  to  leave  to  private  parties 
the  improvement  of  her  inland  navigation  would  not  be 
recompensed  by  the  benefits  she  might  thereby  receive  from 
the  added  initiative  power  of  individual  and  from  the  curb 
placed  upon  the  irresponsibility  of  a  bureaucratic  administra- 
tion. 

(5)  Private  ownership  of  other  means  of  communica- 
tion affords  an  added  reason  for  State  ownership  of  important 
waterways.  The  large  influence  of  American  waterways  on 
railroad  rates  and  the  meagre  power  of  English  inland 
navigation  in  that  direction  have  been  considered.  Competi- 
tion between  railroads  can  no  longer  be  relied  on  as  a  controller 
of  rates.  Waterways  must  regulate  them.  If  the  navigable 
routes  be  operated  by  the  State  they  can  do  so;  if  by  corpor- 
ations, as  in  England,  they  will  combine  with  the  railroads. 
Supplementary  to  this  argument  it  may  be  added  that  the  State 
ownership  of  railways  is  no  reason  against  State  waterways.  | 
Curiously  enough  a  competition  exists  between  the  State  rail- 
ways and  State  waterways  of  Germany  that  has  tended  to 
force  down  rates.  This,  however,  may  be  regarded  as  an 
accidental ,  rather  than  a  necessary ,  relation .  The  chief  advan- 
tage of  the  State  ownership  of  both  means  of  communication 
results  from  their  co-ordination  in  such  a  way  that  each  per- 
forms the  commercial  service  it  is  best  fitted  for,  and  in  such 
a  way  that  each  increases  the  usefulness  of  the  other. 

Whether  the  question  be  viewed  from  the  standpoint  of 

wickelung  und  dem  Mass  der  Initiative  der  Kinzelnen,  welche  jenehervorgerufen 
hat.  Wo  Initiative,  werden  Kanale  auch  ohne  Staat  gebaut.  Wo  Jahrhunderte 
von  Staatseinwirkung  alle  private  Initiative  ertodtet  haben,  sind  es  hochstens 
fremde  Kapitalisten,  die  bauen.  Vgl.  die  Gas-  und  Wasseranstalten  in  Deutsch- 
land.  (2)  Von  gegenwartigen  politischen  Verhaltnissen.  Wo  Staat  alles  ist,  ist 
Kanalbau  dutch  Private  besser,  sonst  tyrannisirt  die  Partei,  die  den  Staat  in 
Handen  hat,  auch  die  Kanalschifffahrt.  Wo  Private  alles  sind,  Bau  durch  Staat, 
um  Monopol  der  Privaten  zu  brechen." 

I  have  translated  "  Kanal "  by  waterway,  because  that  expresses  the  thought 
Professor  Brentano  had  in  mind. 


a 

e 


98  ANNANS  OF  THE  AMERICAN  ACADEMY. 

theoretical  advantages  and  disadvantages  of  State  improve- 
ment and  extension  of  inland  waterways,  or  whether  these 
theoretical  considerations  be  modified  by  taking  into  account 
peculiarities  in  national  temperament,  and  differences  of  pres- 
ent circumstances  in  various  countries,  the  reasons  for  State 
construction  of  many  works  seem  conclusive.  The  improve- 
ment of  lakes  and  large  rivers,  and  the  construction  of  canals 
of  large  commercial  importance,  are  clearly  the  duty  of  the 
State.  The  objection  given  above,  that  the  functions  of  the 
State  will  thus  be  unduly  augmented,  has,  on  analysis,  but 
little  force.  Where  railways  are  in  private  ownership,  it  is 
the  duty  of  the  State  to  preserve  the  waterways  as  competi- 
ive  routes  of  commerce  ;  and  when  waterway  improvements 
are  made  by  private  companies,  the  State  can  only  do  this,  as 
the  Bnglish  experience  clearly  shows,  by  fixing  the  dimen- 
sions of  artificial  water-courses,  by  establishing  rules  for 
administering  the  waterway,  and  by  controlling  rates  and 
tolls.  The  functions  exercised  by  the  State  in  this  control 
of  a  waterway,  must  necessarily  be  many,  and  ownership 
adds  to  these  offices  little  more  than  the  increased  taxation 
necessary  to  meet  the  expenses  of  construction.  Whether  it  is 
possible  for  the  State  to  control  rates  on  private  waterways 
in  such  a  way  as  to  maintain  the  competition  with  railroads 
that  is  desirable,  may  be  doubted.  England  has  failed,  or 
nearly  so,  in  this  respect. 

In  the  improvement  of  important  lakes  and  large  rivers, 
and  in  the  construction  of  canals  of  wide  commercial  import- 
ance, the  State  cannot  be  charged  with  sectionalism.  Still, 
as  in  the  case  of  the  United  States,  where  nearly  all  improve- 
ments of  waterways  are  made  by  the  State,  there  is  always 
the  danger  that  the  public  will  be  taxed  for  the  benefit  of 
small  sections.  The  United  States  and  the  several  States 
have  not  always  been  careful  enough  in  choosing  works  of  a 
national  character,  and  money  has  wrongly  been  spent  on 
works  of  only  a  local  importance.  These  local  works  have 
not  only  favored  sections,  but  have  involved  a  waste  of 


CONSTRUCTION  AND  IMPROVEMENT  OF  WATERWAYS.  99 

capital.  The  United  States  and  the  several  States  in  legis- 
lating regarding  internal  improvements,  must  ever  be  on  their 
guard  against  works  not  of  State  or  national  importance, 
lyocal  works  should  be  left  to  localities  or  individuals. 

The  economical  expenditure  of  money  by  the  State  demands 
both  a  thorough  acquaintance  on  the  part  of  the  legislature 
with  the  industrial  conditions  and  needs  of  the  country,  and 
a  knowledge  of  the  ability  of  improved  waterways  to  meet 
those  conditions  and  needs.  The  character  of  the  waterway 
that  will  best  meet  the  requirements  in  a  particular  case,  must 
also  be  known.  An  insufficient  knowledge  of  the  needs  of 
trade,  and  of  the  means  of  transportation  best  calculated  to 
meet  those  needs,  has  resulted  in  many  unwise  river  improve- 
ments and  canal  constructions.  To  prove  this,  it  is  only 
necessary  to  point  to  the  less  important  canals  of  France, 
which  fall  far  short  of  paying  interest  on  invested  capital. 
The  canals  of  Ohio  and  Indiana  and  other  American  States, 
were,  in  many  cases,  located  and  constructed  without  suffi- 
cient data.  Many  canals  have  been  constructed,  and  even 
since  the  introduction  of  the  railroad,  where  a  cheap  local 
railway  would  better  have  been  placed,  and  would  have  been 
placed  had  the  characteristics  of  the  two  agents  of  commerce 
been  better  known. 

The  real  functions  of  inland  Waterways  in  commerce  are 
now  being  studied,  and  are  being  better  understood.  Noth- 
ing else  is  doing  so  much  to  aid  this  study  as  the  International 
Biennial  Congresses  on  Inland  Navigation.  The  fourth  one 
of  these  congresses  was  held  in  Manchester,  England,  in 
1890,  and  the  fifth  in  Paris,  August,  1892.  The  reports  of 
their  proceedings,  and  the  papers  presented  are  printed,  both 
in  English  and  French,  and  contain  a  rich  mine  of  historical, 
statistical,  and  technical  information  regarding  the  inland 
navigation  of  the  several  countries  of  the  world.  It  will 
have  been  noticed  that  the  reports  of  the  fourth  and  fifth  con- 
gresses, have  been  made  frequent  use  of  in  the  preparation 
of  this  work.  Reference  has  been  made  to  the  work  done 


ioo          ANNALS  OF  THE  AMERICAN  ACADEMY. 

by  the  Commission  on  International  Statistics  of  Inland 
Waterways,  that  was  appointed  by  the  Frankfurt  Congress  in 
1888.  The  Fifth  Congress  which  met  in  Paris,  August,  1892, 
devoted  a  good  deal  of  time  to  the  consideration  of  the  rela- 
tion of  waterways  and  railroads,  and  did  much  to  emphasize 
the  fact  of  their  being  complementary  in  character.  The 
Sixth  Congress  will  meet  next  year  in  Amsterdam.  These 
gatherings  bring  together  engineers  prominent  in  official  and 
in  private  life,  and  the  discussions  do  much  to  promote  a 
more  scientific  conception  of  the  waterway  as  a  means  of 
transportation . 

Waterways  conventions,  called  to  consider  the  needs  of 
particular  water  routes  and  the  benefits  which  their  improve- 
ment will  bring  about,  are  a  valuable  agency  in  bringing  to 
the  attention  of  the  public  and  of  Congress  the  works  whose 
promotion  will  do  most  to  advance  inland  navigation.  The 
more  carefully  and  the  more  widely  the  relation  of  the  im- 
portant waterways  to  commerce  is  studied,  the  wiser  will 
corporations  and  the  government  proceed  with  the  works  of 
improvement.  A  striking  illustration  of  this  is  afforded  by 
the  convention  which  was  held  in  Detroit,  Michigan,  Decem- 
ber 17  and  1 8,  1891,  to  consider  the  question  of  a  twenty 
and  twenty -one  foot  waterway  through  the  channels  connect- 
ing the  Great  Lakes.  The  convention  was  suggested  by 
Congressman  Chipman.  It  was  attended  by  delegates  from 
six  States  and  from  Canada,  representing  boards  of  trade, 
shippers'  associations,  vessel  owners,  engineers  in  charge  of 
the  improvement  of  the  lakes,  and  congressmen  from  the 
States  contiguous  to  the  lakes.  The  needs  of  the  various 
parts  of  the  Great  Lakes  were  discussed,  the  relation  of  deep 
channels  to  the  development  of  the  lake  commerce  and  to  the 
industrial  progress  of  the  Northern  States  was  considered, 
and  the  bearing  of  the  lake  transportation  on  the  rate  ques- 
tion was  the  subject  of  much  consideration.  The  proceed- 
ings and  papers  of  the  convention,  were  printed  and  distrib- 
uted in  pamphlet  form.  The  memorial  to  Congress  had  the 


CONSTRUCTION  AND  IMPROVEMENT  OF  WATERWAYS.   101 

effect  of  securing  the  appropriation  necessary  to  carry  out 
the  work  recommended  by  the  convention. 

A  convention  was  called  the  year  before  at  Kvansville, 
Ind.,  to  discuss  the  needs  of  the  Mississippi  River  system,  and 
the  advantages  that  would  follow  its  further  improvement, 
and  its  connection  with  the  Great  Lakes.  The  importance 
of  the  subject  is  such  that  the  convention  ought  to  have  had 
more  influence  than  it  had.  The  influence  of  the  gathering 
would  have  been  greater  had  it  taken  a  wider  view  of  the 
commercial  interests  involved  and  have  gone  less  into  details 
in  the  recommendation  of  numerous  works  of  minor  im- 
portance. 

The  apathy  of  New  York  State  as  regards  the  improve- 
ment of  her  canals  led  to  the  formation  of  l '  The  Union  for 
the  Improvement  of  the  Canals  of  the  State  of  New  York," 
with  local  unions  throughout  different  parts  of  the  State. 
The  Central  Union  called  a  convention  of  delegates  from  the 
local  unions  to  meet  the  nineteenth  of  October,  1892,  to 
celebrate  the  centennial  of  the  New  York  canals  and  to  con- 
sider the  further  improvement  of  the  State  waterways  and 
the  importance  of  the  work  to  the  commercial  interests  of  the 
State.  Fifty-three  organizations  were  represented  by  596 
delegates.  The  object  of  the  convention  was  agitation,  it  is 
too  early  yet  to  look  for  definite  results. 

January  12,  1893,  a  convention  met  in  Washington  at  the 
call  of  the  Duluth  Chamber  of  Commerce  for  the  purpose  of 
considering  a  deep-water  ship  canal  from  the  Great  Lakes  to 
the  sea.  One  hundred  and  twenty-five  delegates  were  present. 
Chairman  George  H.  Kly,  of  Cleveland,  stated  his  platform  to 
be  '  *  a  waterway  from  the  lakes  to  the  sea  over  territory  of 
the  United  States,  independence  of  Canada,  and  cessation  of 
legislation  in  favor  of  Canadian  lines  of  transportation." 
He  recommended  that  the  convention  do  nothing  more  than 
to  recommend  Congress  to  make  an  appropriation  for  the 
survey  of  a  route.  The  appropriation  was  not  secured,  how- 
ever, at  the  last  session  of  Congress. 


102  ANNAI^S  OF  THE  AMERICAN  ACADEMY. 

Various  conventions  have  been  called  in  the  interests  of 
the  Nicaragua  Canal.  The  most  important  of  these  was  the 
one  that  met  at  New  Orleans,  the  thirtieth  of  November, 
1892,  at  which  delegates  from  every  State  and  Territory  in 
the  Union  were  present.  The  purpose  of  the  convention 
was  to  urge  Congress  to  give  its  aid  to  the  canal  in  order  to 
secure  the  early  completion  of  the  work.  The  present  con- 
dition of  the  canal  and  the  reasons  why  the  United 
States  should  lend  the  work  its  support  will  be  considered 
in  Chapter  XII. 

The  value  of  such  conventions  as  these  is  great.  Wise 
legislation  must  proceed  from  the  intelligence  of  the  public. 
It  may  be  thought  by  some  that  the  influence  of  these 
gatherings  will  be  to  spur  Congress  on  to  excessive  appro- 
priations ;  it  will  rather  be  to  temper  action  with  knowledge 
and  lessen  the  danger  of  misappropriations  in  the  interest 
of  sectionalism. 

The  position  here  taken  in  favor  of  the  construction  by  the 
State  of  all  great  works  of  internal  improvement,  does  not 
exclude  private  enterprise  from  works  of  local  importance. 
On  the  other  hand,  the  execution  of  local  works  should  be 
left,  as  was  stated  above,  to  individuals  or  municipalities, 
the  State,  however,  not  neglecting,  in  any  case,  to  maintain 
the  public  character  of  all  waterways. 


CHAPTER  IX. 

ON   WATERWAYS. 

Vitally  connected  with  the  question  whether  or  not 
corporations  ought  to  improve  inland  waterways  is  the 
subject  of  tolls.  Private  waterways  must  needs  charge  tolls 
for  their  use  by  the  general  public.  The  conclusion  of  the 
preceding  chapter  was  in  favor  of  the  construction  of  import- 
ant waterways  by  the  State,  but  the  question  still  remains — 
How  shall  costs  of  improving,  extending  and  maintaining 
inland  waterways  be  paid?  Should  the  public  treasury 
bear  the  expense  or  should  tolls  be  paid  sufficient  to  cover 
the  outlay  ?  The  subject  brings  the  discussion  into  the 
realm  of  finance  and  involves  some  interesting  points  in 
theory. 

Tolls  are  no  longer  collected  on  large  rivers,  and  there  is 
a  movement  to  abolish  them  on  canals.  France  and  Italy 
have  done  away  with  all  tolls.  In  Belgium  "navigation 
dues  are  continually  being  reduced  and  their  complete 
suppression  seems  rather  a  question  of  time  and  budget  than 
of  principle. ' '  *  The  rivers  of  Holland  are  free  and  the 
reduction  of  canal  dues  is  probable.  The  abolition  of  tolls  i 
on  the  English  canals  is  impossible  so  long  as  they  remain 
private  property ;  but  the  State  regulates  the  dues.  Most 
canals  owned  by  the  United  States  government  are  those 
constructed  in  connection  with  the  improvement  of  natural 
waterways,  but  all  are  maintained  for  free  use.  New  York 
abolished  tolls  on  the  canals  when  she  purchased  them. 
Ohio  owns  the  canals  within  her  boundaries,  but  charges 
tolls  for  their  use.  The  same  is  true  of  Illinois  as  regards 
the  Illinois  and  Michigan  Canal.  Most  canals  within  the 

*  Dufourny,  p.  16  of  Article  in  Report  of  Fourth  International  Congress  on 
Inland  Navigation. 

(103) 


io4  ANNALS  OF  THE  AMERICAN  ACADEMY. 

|  United  States  are  private  property  and,  of  course,  are  not 
free  waterways. 

The  movement  for  the  abolition  of  tolls  is  prompted  by  a 
desire  to  promote  inland  commerce,  and  where  such  charges 
have  been  done  away  with,  navigation  has  increased.  The 
facts  in  regard  to  France  were  given  in  Chapter  IV.  The 
abolition  of  tolls  on  Italian  waterways,  also,  "  has  increased 
the  facility  and  amount  of  intercommunication."*  Such  a 
result  is,  of  course,  to  be  expected  ;  but  the  question  may  be 
raised  whether  the  abolition  of  tolls  is  in  all  cases  necessary 
to  a  promotion  of  inland  navigation,  and  whether  this  is  the 
only  way  of  accomplishing  the  desired  end.  If  tolls  may 
still  rightly  be  charged  on  some  waterways,  what  ones  ought 
to  be  free  and  what  ones  not  ?  According  to  what  principle 
ought  charges  to  be  assessed  ? 

Four  principles  may  be  made  the  basis  of  the  charges 
which  the  government  may  require  those  to  pay  who  use  a 
public  waterway  :  (i )  The  State  may  impose  the  charges  with 
the  intent  of  taxing  inland  navigation  for  the  purpose  of 
raising  money,  not  only  to  maintain  and  improve  her  water- 
ways, but  also  to  help  meet  the  general  expenses  of  the 
State.  In  this  case  the  maximum  limit  of  the  charges  would 
be  fixed  at  the  point  of  the  greatest  productivity  of  the  tax. 

i  (2)  The  State  may  regard  the  money  invested  in  the  improve- 
ment of  inland  navigation  as  a  business  enterprise  on  which 
a  certain  rate  of  profit  ought  to  be  obtained.  If  this  view 
be  taken,  the  charges  will  be  fixed  so  as  to  secure  this  profit. 
In  both  these  cases  the  State  is  taxing  inland  navigation, 
but  the  principles  differ  from  each  other  in  that  different 

,  considerations  determine  the  point  of  maximum  charges. 

|  (3)  The  State  may  assess  tolls  on  the  principle  of  requiring 
navigation  to  pay  the  State  for  the  labor  that  the  State  per- 
forms in  making  and  maintaining  improvements.  In  this 
case  the  State  will  fix  the  tolls  so  that  it  will  be  able 
just  to  recoup  itself  for  actual  expenses  of  construction  and 

*  Bompiani,  p.  3.    Ibid. 


ON  WATERWAYS.  105 

maintenance.  The  State  requires  her  waterways  to  be  self- 
supporting — no  more,  no  less.  (4)  The  fourth  principle, 
and  the  one  on  which  several  States  now  act,  is  to  make  no 
charges,  but  to  improve,  extend  and  maintain  waterways  at 
the  expense  of  the  general  public. 

Inland  commerce  is  a  very  undesirable  object  of  taxation. 
The  State  can  hardly  place  taxes  where  they  will  be  more 
burdensome.  No  State  would  to-day  think  of  taxing  inland 
navigation  to  the  limit  of  maximum  productivity  of  tax 
income,  nor  of  imposing  any  heavy  burden  upon  the  com- 
merce on  her  waterways.  The  wisdom  of  the  State's  trying 
to  secure  any  profits  on  capital  invested  in  the  improvement 
of  inland  commerce  for  the  purpose  of  replenishing  the 
budget  may  be  questioned.  The  Prussian  government  has, 
with  doubtful  propriety,  turned  a  part  of  the  surplus  earn- 
ings of  the  State  railroads  into  the  general  budget.  The 
deficit  in  the  finances  might  better  have  been  covered  by 
taxation,  and  the  profits  derived  from  the  railroads  have  been 
used  in  developing  the  transportation  system  of  the  State. 
The  primary  object  of  the  State  in  improving  waterways, 
and  building  railroads,  is  to  promote  commerce  and  travel ; 
tolls  and  tariffs  high  enough  to  yield  profits  will  most  surely 
do  much  to  defeat  that  object ;  especially  will  this  be  so  if 
the  profits  so  obtained  are  not  used  in  developing  the  means 
of  communication  and  transportation.  The  State,  then, 
ought  to  choose  between  the  third  and  fourth  principles,  and 
either  make  inland  navigation  free  or  make  such  charges  as 
will,  in  whole  or  in  part,  cover  the  outlay  for  construction 
and  maintenance. 

The  State  having  decided  that  the  waterways  shall  not 
directly  contribute  to  the  payment  of  other  expenses  than 
those  the  waterways  themselves  incur,  the  question  of  charges 
or  no  charges  may  be  decided  according  to  the  general  rule 
that  the  incidence  of  the  burden  of  expense  should  fall  on  those 
persons  benefited,  and,  as  nearly  as  possible,  proportionally  to  \ 
the  benefits  received.  There  are  three  classes  which  derive 


io6  ANNALS  OF  THE  AMERICAN  ACADEMY. 

profit  from  the  waterway.  The  general  public,  including 
producer  and  consumer,  those  who  directly  use  the  waterway, 
as  shippers  or  carriers  of  freight  on  the  waterway,  and 
persons  owning  property  along  or  near  the  line  of  the  canal 
or  improved  river. 

How  shall  these  three  classes  be  made  to  bear  burdens 
proportionally  to  benefits  ?  The  improvement  of  great  water 
courses  like  the  Mississippi  River  and  its  important  branches, 
the  connection  of  two  long  water  routes,  the  removal  of  the 
obstructions  to  commerce  on  a  chain  of  great  lakes,  such  as 
those  in  the  north  of  the  United  States,  and  the  extension 
of  the  commerce  of  these  lakes  to  the  Atlantic  Ocean,  all 
these  are  expenses  which  ought  not  to  be  borne,  at  least  not 
more  than  partially  borne,  by  the  particular  persons  who 
make  use  of  the  waterway.  The  country,  as  a  whole,  re- 
ceives most  of  the  benefits  of  such  improvements  and  it 
should  pay  most  of  their  costs.  Tolls  on  the  commerce  of 
such  national  waterways  sufficient  to  cover  all  the  expenses 
of  improvement  and  maintenance  would  place  the  tax  on 
only  a  part  of  the  recipients  of  benefits  and  would  at  the 
same  time  place  an  undesirable  restriction  on  commerce. 
The  expenses  ought,  therefore,  to  be  borne  mostly  by  the 
United  States  and  partly  by  the  individuals  who  are  the 
direct  recipients  of  benefits. 

The  case  of  a  canal  leading  from  coal  or  iron  mines  in  one 
\  part  of  a  particular  State  to  a  large  cify  in  another  part  of  the 
|  same  State  is  different.  Here  the  benefits  to  the  United 
States,  as  a  whole,  are  but  slight,  those  of  the  particular 
State  are  greater,  while  the  advantages  gained  by  those  who 
use  the  canal  and  by  those  who  own  property  alongside  or 
near  it  may  be  as  great  as  in  the  case  of  a  waterway  of 
distinctively  national  importance ;  such  a  canal  being  of 
special  value  to  the  State,  as  a  whole,  within  which  it  lies 
should  be  constructed  and  largely  paid  for  by  the  State, 
rather  than  by  the  United  States,  or  by  those  that  make 
use  of  the  canal  after  completion.  The  United  States, 


Tou<s  ON  WATKRWAYS.  107 

however,  would  be  justified  in  sharing  a  small  part  of  the 
cost  of  constructing  such  a  waterway,  not  only  because  the 
country  at  large  receives  certain  benefits,  but  because  the 
benefits,  local  and  national,  will  be  increased  by  such  aid 
because  of  an  earlier  completion  and  better  execution  of  the 
work. 

In  the  case  of  canals,  both  of  State  and  of  national  import- 
ance, individuals  directly  benefited  ought  to  contribute  to- 
ward meeting  the  expense.  This  could  be  accomplished, 
in  the  case  both  of  national  and  State  waterways  by  taxing 
the  increment  in  the  value  of  the  property  along  or  near 
the  canal  due  to  the  construction  of  the  waterway.  The 
justice  of  appropriating  a  part  of  this  increment  seems 
clear.  Professor  Meitzen,  of  the  University  of  Berlin,  says, 
1 '  It  may  well  be  doubted  whether  it  is  right  in  principle  to 
make  the  profits  of  a  canal  from  the  commerce  on  it  bear 
alone  the  entire  cost  of  construction."*  The  Prussian  min- 
istry expressed  the  same  opinion  in  1882. 

Although  this  special  taxation  of  individuals  receiving 
the  greatest  benefits  seems  just,  the  method  by  which  it  may 
best  be  done  is  not  so  clear.  The  principle  has  long  been 
carried  out  by  cities  in  laying  out  and  improving  streets, 
and  its  application  to  waterway  improvements  is  by  no 
means  impossible.  One  way  of  laying  a  burden  on  those 
receiving  direct  benefit  from  the  canal  by  the  increase  in  the 
value  of  property  would  be  for  the  State  to  appraise  the 
value  of  the  property  taken  for  the  waterway  and  also  the 
benefits  conferred  by  the  waterway  on  the  owners  of  property 
alongside  or  near  it.  On  the  basis  of  such  appraisal  the 
contributions  from  those  receiving  direct  advantage  could  be 
fixed  by  the  State. 

Though  France  has  since  1880  maintained  her  waterways 
at  public  expense  she  has  done  something  to  distribute  the 
expenses  according  to  benefits.  From  1880  to  1888  the  costs 
were  paid  from  an  extraordinary  budget  whose  funds  were 

*  "  Die  Kanalfrage  in  Preussen.  " 


io8  ANNAI<S  OF  THE  AMERICAN  ACADEMY. 

obtained  by  loans  and  from  the  surplus  of  the  ordinary 
budget.*  The  Republic  has  been  aided  in  some  cases  by 
the  Departments.  Most  of  the  subventions  by  the  Depart- 
ments were  paid  by  levying  special  taxes  on  interested 
parties.  It  has  been  proposed  in  France  to  establish  Navi- 
gation Chambers  which  shall  have  control  of  the  ameliora- 
tion and  utilization  of  navigable  routes  and  have  the  power 
to  levy  special  taxes  to  cover  a  part  of  the  expenditures. 
Should  this  proposal  be  carried  out  it  would  retain  the 
maintenance  of  navigable  ways  in  the  hands  of  the  State,  and 
at  the  same  time  secure  a  fuller  sharing  of  expenses  on  the 
part  of  interested  parties. 

How  the  increment  of  property  resulting  from  the  con- 
struction of  waterways  may  be  taxed  is  a  problem  each  State 
must  solve  for  itself.  The  relation  of  the  State  to  its  several 
parts  and  to  its  citizens  varies  with  each  nation,  and  the 
commercial  conditions  are  not  the  same  in  any  two  countries. 
The  principle  involved  in  taxing  the  increment  is  sound,  the 
application  of  this  principle  should  be  the  aim  of  legislation 
in  the  future  more  than  it  has  been  in  the  past. 

The  cost  of  constructing  a  local  canal  or  improving  a 
small  water-course,  in  order,  thereby,  to  connect  two  cities 
not  distant  from  each  other,  or  to  bring  a  city  in  direct  con- 
nection with  a  near-lying  lake  or  ocean,  may  properly  be  left 
by  the  State  to  the  individuals  and  cities  directly  interested, 
they  being  subject,  as  has  been  pointed  out,  to  general  legis- 
lation on  the  part  of  the  State.  On  these  waterways  tolls  or 
some  other  form  of  charges  will,  of  a  necessity,  be  laid. 

To  what  extent  the  State,  in  the  case  of  canal  construction, 
should  reimburse  itself  by  means  of  tolls  or  other  charges  for 
first  costs  and  for  expense  of  maintenance  has  been  partly 
Answered.  Great  national  water  routes,  both  in  the  natural 
jand  artificial  parts,  should  be  free.  The  canals  within  a 
single  State  of  the  United  States  should  be  maintained — 

*  In  theory,  at  least.  In  practice,  however,  a  surplus  of  the  ordinary  budget 
would  be  hard  to  find. 


ON  WATERWAYS.  109 

not  necessarily  constructed — at  the  expense  of  the  State  as  a 
whole,  provided  the  benefits  accrue  to  the  State  as  a  whole. 
To  the  extent  that  the  benefits  are  merely  private  or  local 
should  the  burdens  of  expense  be  shifted  from  the  State,  in 
order  that  the  incidence  of  taxation  may  fall  according  to  the 
rule  previously  laid  down,  that  the  burden  of  expense  should 
fall  on  those  that  profit  from  the  waterway,  and,  as  nearly  as 
possible,  proportionally  to  the  benefits  received.* 

The  costs  of  constructing  and  maintaining  inland  water- 
ways should,  then,  be  met  as  follows :  In  all  cases  the 
property  owners  who  receive  direct  benefits  from  the  water- ' 
ways  should  contribute  toward  the  expense  of  construction  ; 
there  should  be  no  tolls  on  waterways  of  national  importance, 
nor  on  those  whose  advantages  accrue  to  all  parts  of  a  State  ; 
those  which  are  primarily  of  value  to  particular  parts  of  a 
State,  and  secondarily  to  other  portions  should  be  subject  to 
moderate  tolls  sufficient  to  equalize  burdens  between  the 
adjacent  and  distant  localities  according  to  benefits  received. 

The  abolition  of  tolls  on  waterways  is  not  necessary  to 
their  maintaining  themselves  as  useful  commercial  agents. 
Waterways  that  have  been  wisely  constructed  and  located 
are  able  to  compete  successfully  with  the  railroad  and  perform 
important  commercial  services  without  the  abolition  of  tolls. 
The  considerations  that  should  govern  the  assessment  of 
charges  on  State  waterways  should  be  the  healthy  develop- 
ment of  inland  navigation  and  the  equitable  distribution  of 
the  expenses  incurred. 

*  In  the  case  of  railway  construction  a  division  of  burdens  between  the  general 
and  local  governments  has  taken  place  in  Prussia.  As  a  condition  of  the  con- 
struction of  certain  local  roads  and  feeders  the  State  requires  those  parties  most 
interested  to  donate  the  land  required  for  the  road,  and  has,  in  some  instances, 
required  them  to  defray  a  part  of  the  costs  of  construction.  (Cf.  Sax.  "Trans- 
port-undKommunikalionswcscn,"  in  Schonberg's  Handbuch,  Vol.  i.,  p.  546.) 


CHAPTER  X. 

THE  METHODS  EMPLOYED   BY   THE  UNITED   STATES  TO 

IMPROVE   AND   EXTEND   INLAND   WATERWAYS. 

THE    RIVER   AND   HARBOR   BIIJ,. 

The  work  of  improving  and  extending  the  inland  water- 
ways  of  the  United  States  has  been  an  enterprise  of  individ- 
uals, of  the  States,  and  of  the  Federal  Government.  The 
States  preceded  the  general  government  in  the  field,  and 
for  obvious  reasons.  In  the  days  preceding  the  advent  of 
the  railroad,  when  waterways  were  the  chief  means  of 
communication,  the  State,  as  compared  with  the  national 
government,  stood  relatively  for  more  than  it  does  to-day. 
Our  Union  of  States  was  smaller,  the  powers  exercised 
at  Washington  fewer.  Our  sense  of  nationality  developed 
slowly.  Promoters  of  inland  commerce  looked  to  Congress 
for  aid  but  were  generally  obliged  to  fall  back  upon  the 
States.  There  was  an  economic  reason  however,  stronger 
than  this  political  one.  Commerce  was  then  more  local 
and  less  interstate  in  character.  We  now  regard  the  United 
States,  or  are  at  least  coming  to  do  so,  as  the  industrial 
and  commercial  unit ;  the  great  manufacturing  centres 
of  the  East,  and  the  agricultural  regions  of  the  West 
depend  each  on  the  other,  and  commerce  knows  no  State 
boundaries.  Transportation  has  now  become  very  largely 
an  interstate  matter,  but  in  the  early  decades  of  this  century 
the  future  was  fully  realized.  The  States  not  only  executed 
works  of  local  significance,  but  Congress  left  them  to  con- 
struct waterways  of  such  distinctively  national  importance 
as  the  Erie  and  the  Illinois  and  Michigan  Canals.  New  York, 
Illinois  and  Ohio  are  the  only  States  now  owning  and 
operating  canals.  *  Those  other  States  which  formerly 
owned  canals  have  as  was  seen  either  sold  them  to  corpora- 
tions, abandoned  them,  or  turned  them  over  to  the  United 

*  For  a  history  of  canals,  see  Vol.  IV.  of  Tenth  Census  of  United  States. 

(no) 


THE  RIVER  AND  HARBOR  BIIJ,.  m 

States.  The  improvement  and  extension  of  important 
waterways  have  become  the  charge  of  the  nation  ;  most  local 
canals  have  passed  out  of  the  hands  of  the  State  into  the 
ownership  of  corporations.  The  causes  of  this  were  noted  in 
a  previous  connection. 

The  number  of  waterways  which  in  the  future  receive  aid 
from  the  United  States  needs  in  no  case  to  be  large.  Purely 
local  works  should  be  local  or  individual  enterprises,  and  those 
of  interstate  importance  be  carried  on  by  the  Federal  Gov- 
ernment. Congress  has  recently  assumed  charge  of  certain 
works  of  interstate  importance  that  the  States  have  been 
prosecuting.  The  Saint  Mary's  Canal  and  the  Hudson 
River  are  instances  of  this.  The  discussion  in  Chapter 
VIII.  was  to  the  effect  that  individuals,  the  States  and  the 
National  Government  ought  to  co-operate  in  making  im- 
provements. 

The  action  on  the  part  of  Congress  in  assuming  charge  of 
interstate  commerce  is  one  of  the  many  indications  of  that 
development  of  the  central  government  which  is  necessarily 
attending  the  expansion  of  our  institutions  over  a  new  and 
large  territory,  the  rapid  growth  in  our  population,  and  the 
fast  increasing  complexity  of  our  industrial  and  social  life. 
Inland  navigation  was  naturally  the  part  of  interstate  com- 
merce of  which  Congress  first  assumed  control.  The  natural 
waterways  of  most  countries  have  been  regarded  as  public 
ways  since  feudal  times.  They  are  now  usually  free  high- 
ways. There  were,  therefore,  historical  reasons  why  the 
natural  interstate  water  routes  should  be  improved  by 
Congress  as  soon  as  the  growth  in  the  population  and 
industry  of  the  United  States  made  urgent  the  need  for 
commerce.  From  1789  Congress  constructed  the  light- 
houses, beacons,  buoys,  etc.,  necessary  to  render  coastwise 
and  lake  commerce  safer.  In  1822  the  Federal  Government 
took  out  of  the  hands  of  the  States  the  entire  work  of  im- 
proving harbors,  and  began  also  to  appropriate  money  to 
improve  inland  navigation.  For  ten  years  the  Federal 


ii2  ANNAI^  OF  THE  AMERICAN  ACADEMY. 

Government,  as  well  as  the  States,  was  active  in  works  of 
internal  improvement.  Then  came  the  dominance  of  strict 
constructionism,  and  the  opposition  of  President  Jackson  and 
the  Democrats  to  internal  improvements.  The  Federal  Gov- 
ernment turned  over  canal  building  and  most  river  improve- 
ments to  the  States.  From  Jackson's  administration  to  the 
close  of  the  war  of  the  rebellion  very  little  was  done  by 
Congress  to  foster  inland  navigation.* 

The  river  and  harbor  bill  in  its  present  form  dates  from 
1870.  From  1830  to  1870  most  appropriations  for  rivers 
and  harbors  were  not  made  directly,  but  by  means  of  riders 
attached  to  other  bills,  f  The  bill  originates  in  the  House 
Committee  on  Rivers  and  Harbors,  and,  since  1882,  has 

*  The  overthrow  of  the  Whig  system  of  internal  improvements  was  not  the 
result  of  political  causes  alone.  Compare  the  author's  paper  on  River  and  Harbor 
Bills  in  Volume  II.  of  the  ANNALS  OF  THE  AMERICAN  ACADEMY  OF  POLITICAL 
AND  SOCIAL  SCIENCE,  May,  1892 : 

"  The  real  causes  of  the  abandonment  of  Congressional  aid  to  road  and  canal 
building  lay  neither  with  President  Jackson  nor  with  strict  construction.  The 
building  of  turnpikes  practically  ceased  with  the  advent  of  the  railroad  in  1830. 
The  causes  that  led  to  the  cessation  of  canal  building  were,  nrst,  the  opposition  to 
the  tariff.  The  bitter  struggle  against  the  tariff  of  1828  naturally  included  opposi- 
tion to  internal  improvements — the  other  half  of  the  American  system.  The 
second  cause — a  somewhat  complex  one — is  found  in  the  land  policy  of  the  United 
States.  The  large  revenues  from  the  tariff,  and  more  especially  from  the  land 
sales,  caused  a  treasury  surplus  to  exist  during  the  years  from  1830  to  1836 ;  this 
surplus  led  to  distribution,  and  distribution  did  much  to  put  an  end  to  internal 
improvements  by  the  federal  government.  This  large  surplus  could  not  be 
lessened  by  altering  the  tariff,  because  of  the  compromise  of  1833  ;  and  the  oppo- 
sition to  cheap  lands  was  so  strong  that  no  measure  decreasing  the  price  of  lands 
could  be  passed.  In  view  of  the  existence  of  this  surplus,  and  in  view  of  Jackson's 
opposition  to  Congressional  aid  to  local  works  of  improvement,  the  Whigs  changed 
front  in  the  midst  of  the  battle.  They  began  advocating  the  distribution  of  the 
surplus  arising  from  land  sales  among  the  States,  and  the  surrender  to  the  States 
of  the  prosecution  of  works  of  internal  improvement.  President  Jackson  had 
favored  this  plan  in  1829,  and  afterward  also  ;  but  in  1836  he  abandoned  distribu- 
tion. The  Whigs  then  very  naturally  clung  to  the  idea  all  the  more  tenaciously. 
Distribution  came  in  1836,  and  with  results  so  disastrous  that  there  was  soon  no 
money  to  distribute.  The  odium  attaching  to  distribution  did  much  to  bring  into 
disrepute  internal  improvements,  to  foster  which  works  the  national  funds  had  left 
the  treasury.  The  third  cause  for  the  overthrow  of  the  canal,  and  the  strongest 
one,  was  the  railroad.  The  extension  of  railroads  during  the  decade  from  1830  to 
1840  was  rapid,  and  the  superiority  which  they  possess  over  canals  as  agents  of 
most  kinds  of  traffic  was  quickly  recognized." 

f  From  1854  to  1870  most  appropriations  were  made  under  the  head  of  "  fortifica- 
tions, etc." 


THE  RIVKR  AND  HARBOR  Biu,. 

been  passed  bi-ennially.  The  construction  of  the  works  pro- 
vided for  by  the  bill  is  in  the  charge  of  the  Secretary  of  War 
and  the  United  States  engineers.  Appropriations  made  011 
the  basis  of  the  surveys  and  estimates  of  the  War  Depart- 
ment are  granted  for  works  previously  begun  and  for  new 
ones.  Each  bill  directs  a  large  number  of  new  surveys  to 
be  made  *  and  the  engineers  make  a  report  on  the  work  either 
as  ' '  worthy  "  or  as  ' '  unworthy  ' '  of  execution.  By  ' '  worthy 
of  improvement ' '  f  the  engineers  mean  that  the  project  is- 
feasible  and  that  the  increase  of  commerce  which  would  re- 
sult from  the  work  would  be  sufficient  to  warrant  the  requi- 
site outlay  of  capital.  In  declaring  a  waterway  worthy  of 
improvement,  the  engineers  do  not  necessarily  recommend 
the  execution  of  the  work.  This  fact  is  sometimes  disre- 
garded. The  chief  of  engineers  is  required  by  law  to  make 
the  estimates,  but  were  he  to  name  the  works  that  Congress 
ought  to  undertake,  he  would  recommend  far  fewer  than 
Congress  now  authorizes. 

The  estimates  submitted  by  the  chief  of  engineers  are  for 
the  costs  necessary  to  complete  each  improvement,  but  if  Con- 
gress authorizes  the  work  it  usually  makes  an  appropriation 
only  sufficient  to  begin  the  execution,  often  a  sum  only  twenty- 
five  per  cent  of  the  estimated  expense  of  completion.  This 
has  been  well  styled  the  "  driblet  system  of  appropriations."  J 

*  The  last  bill,  approved  July  13,  1892,  provided  for  144. 

f  Section  7  of  the  last  law  reads  as  follows :  "  That  the  preliminary  examinations 
ordered  in  this  Act  shall  be  made  by  the  local  engineer  in  charge  of  the  district,  or 
an  engineer  detailed  for  the  purpose  ;  and  such  local  or  detailed  engineer  and  the 
division  engineer  of  the  locality  shall  report  to  the  chief  of  engineers ;  first, 
whether,  in  their  opinion,  the  harbor  or  river  under  such  examination  is  worthy  of 
improvement  by  the  general  government,  and  shall  state  in  such  report  fully  and 
particularly  the  facts  and  reasons  on  which  they  base  such  opinion,  including  the 
present  and  prospective  demands  of  commerce,  and,  second,  if  worthy  of  improve- 
ment by  the  general  government,  what  it  will  cost  to  survey  the  same,  with  the 
view  of  submitting  plan  and  estimate  for  its  improvement ;  and  the  chief  of 
engineers  shall  submit  to  the  Secretary  of  War  the  reports  of  the  local  and  divi- 
sion engineers,  with  his  views  thereon  and  his  opinion  of  the  public  necessity  or 
convenience  to  be  subserved  by  the  proposed  improvement,  and  all  such  reports 
of  preliminary  examinations  with  such  recommendations  as  he  may  see  proper  to 
make,  shall  be  submitted  by  the  Secretary  of  War  to  the  House  of  Representatives, 
and  are  hereby  ordered  to  be  printed  when  so  made." 

I  Report  of  the  House  Committee  on  Rivers  and  Harbors,  April  9,  1892. 


ii4  ANNALS  OF  THE  AMERICAN  ACADEMY. 

The  method  by  which  Congress  legislates  may  be  illustrated 
by  describing  the  framing  of  the  bill  of  July  13,  1892.  The 
purpose  of  the  committee  was  to  frame  a  twenty-one  million 
dollar  bill,  that  sum  being  what  the  condition  of  the  treasury 
warranted.  This  general  limit  having  been  set,  the  estimates 
submitted  by  the  chief  of  'engineers  were  gone  through  with. 
The  estimates  of  the  amounts  that  might  profitably  be  spent 
on  works  already  begun  were  first  considered,  then  those  for 
new  works  were  taken  up.  The  former  were  greatly  scaled 
down,  and  seventy  of  the  new  projects,  of  which  the  bill  of 
1890  had  directed  preliminary  examination  to  be  made  and 
which  had  been  reported  by  the  engineers  as  "worthy," 
were  excluded  from  consideration  by  the  committee.  As 
reported  to  the  House  the  bill  appropriated  $21,209,975,  and 
was  based  on  estimates  aggregating  $69,814,915.*  The 
bill  contained  400  appropriations,  of  which  only  twenty- 
eight  were  for  new  works.  The  sum  designated  for  the 
improvement  of  rivers  and  other  waterway  channels  was 
$14, 365, 979;  the  sum  for  harbors,  $6,799,996  ;  for  examina- 
tions, contingencies  and  incidental  expenses,  $125,000.  As 
passed  by  the  House  the  bill  appropriated  $21 ,346,975.  The 
Senate  Committee  on  Commerce  raised  the  amount  to  $22,- 
470,118.  The  sum  that  was  finally  appropriated  was  some- 
what less  than  this. 

*  Compare  the  following  itemized  estimate  taken  the  report  of  the  House  Com- 
mittee on  Rivers  and  Harbors  : 

Estimates  of  the  chief  of  engineers  of  the  amounts  that  can  be  profitably 
expended  in  the  fiscal  year  ending  June  30,  1893,  exclusive  of  the 

Mississippi  and  Missouri  rivers, $52,489,950 

Estimates  of  the  Mississippi  River  Commission,  including  certain  har- 
bors on  the  river  and  for  the  work  at  the  mouth  of  Red  River,   .   .   .        7,275,000 
Estimates  of  the  Missouri  River  Commission, 3,100,000 

Total  for  the  old  projects, $62,864,950 

Estimates  of  new  projects  considered  by  the  committee  for  which  appro- 
priations have  been  recommended,  but  which  are  not  included  in 
the  [above]  estimates  of  the  chief  of  engineers.t 6,949,995 

Total  for  old  projects  and  new  projects  considered  by  the  com- 
mittee,     $69,814,955 

tThis  does  not  imply  that  the  committee  considered  works  which  the  engineers 
had  not  surveyed  and  submitted  estimates  concerning. 


THE  RIVER  AND  HARBOR  Biu,.  115 

The  execution  of  the  works  of  improvement  for  which 
appropriations  are  thus  made  is  let  to  contractors  by  the 
Secretary  of  War.  He  and  the  United  States  engineers 
have  control  over  the  work  done  by  the  contractors. 

Our  method  of  aiding  the  improvement  of  inland  naviga- 
tion differs  from  those  pursued  by  England,  Germany  and 
France,  and  a  glance  at  their  methods  will  prepare  the  way 
to  a  more  intelligent  criticism  of  our  legislation.  In  England 
most  improvements  of  rivers  and  harbors  have  been  made  at 
the  expense  of  corporations,  municipal  and  private.  The 
execution  of  the  works  is  performed  sometimes  by  a  munici- 
pality, but  usually  by  a  "  trust ; "  i.  e.,  a  private  corporation 
chartered  by  Parliament.  These  trusts  often  are  aided  by 
cities  and  by  Parliament,  and  collect  harbor  dues  and  tolls. 
In  Germany,  as  might  be  expected  from  the  nature  of  the 
State,  the  government  takes  the  initiative,  pays  for  the  works 
and  executes  them  herself.  In  France,  also,  the  State  defraj^s 
the  expense  of  improving  and  extending  inland  navigation. 
The  Department  of  Public  Works  has  charge  of  the  improve- 
ment of  inland  navigation  ;  it  submits  plans  and  estimates 
for  the  works  needed  on  rivers,  canals  and  harbors.  The 
plans  and  estimates,  however,  unlike  those  submitted  by  the 
United  States  chief  of  engineers,  are  submitted  largely  on 
the  department's  own  initiative,  and  are  made  with  the  end 
in  view  of  securing  for  the  country  as  a  whole  a  unified 
system  of  inland  water  routes.  The  execution  of  the  works 
that  are  authorized  is  sometimes  carried  out  directly  by  the 
government,  whose  engineers  employ  the  laborers  and  super- 
vise their  work,  often  by  contractors,  according  to  the  plans 
and  under  the  supervision  of  the  engineers  of  the  Department 
of  Public  Works. 

The  distinguishing  feature  of  the  English  as  contrasted 
with  our  method  of  improving  inland  navigation  is  the 
essentially  private  character  of  the  former.  The  method 
followed  by  France  and  the  German  States  differs  from  that 
pursued  by  the  United  States,  first,  in  the  systematic  character 


n6  ANNALS  OF  THE  AMERICAN  ACADEMY. 

of  the  former  as  opposed  to  the  local,  sporadic  nature  of 
ours ;  second,  in  the  greater  power  given  the  administrative 
branch  of  government  as  regards  both  the  initiation  of 
works  of  improvement  and  the  exercise  of  discretion  in  the 
expenditure  of  money  appropriated  ;  and,  third,  in  the  fact 
that  the  French  and  Germans  consider  plans  for  making  a 
particular  improvement  in  to  to.  The  legislature  considers 
plans,  as,  indeed,  we  do,  for  the  entire,  the  completed  work  ; 
but,  unlike  us,  if  they  decide  to  make  an  improvement  they 
appropriate  money  enough  to  enable  the  entire  enterprise  to 
be  begun  and  contracts  made  for  the  execution  of  the  whole 
work. 

These  differences  between  our  own  method  of  making 
improvements  and  those  of  other  countries  suggest  several 
criticisms  of  the  River  and  Harbor  Bill.  As  regards  the 
improvement  of  important  inland  waterways  by  the  State  and 
by  corporations,  the  arguments  in  favor  of  the  State  are  con- 
clusive. They  were  given  in  Chapter  VIII. ,  and  need  not 
be  repeated  here.  Our  policy  in  this  regard  is  decidedly 
preferable  to  that  of  England.  In  another  regard  both  England 
and  the  United  States  have  failed  to  secure  the  best  results 
from  the  improvement  of  inland  water  routes.  Neither 
country  has  anything  like  a  system  of  inland  waterways, 
constructed  according  to  one  common  standard  of  dimensions. 
Although  still  far  from  completing  the  task,  France  has  done 
much  to  bring  about  unity  in  her  system  of  inland  water- 
ways. In  the  United  States,  on  the  contrary,  the  sporadic 
character  of  our  works  has  prevented  the  unification  of  our 
natural  inland  water  routes.  Although  the  United  States  has 
spent  nearly  $230, 000,000  on  rivers  and  harbors  during  this 
century,  the  commerce  of  the  Great  I^akes  is  still  practically 
unconnected  with  the  sea  and  with  the  great  river  system  of 
the  Mississippi  Valley,  while  the  commerce  of  the  Pacific 
slope  is  still  waiting  for  access  to  the  Mississippi  and  the 
Atlantic  by  way  of  a  Nicaragua  Canal.  It  has  been  seen 
in  a  previous  chapter  how  rapidly  the  inland  commerce  of 


THE  RIVER  AND  HARBOR  Biu,.  117 

France  has  increased  since  the  government  has  begun  the 
reconstruction  of  her  waterways  with  the  intent  of  giving 
them  common  dimensions.  The  passage  of  freight  from  one 
water-course  to  another  without  reloading  is  essential  to  an 
extensive  inland  navigation.  Reloading  causes  delay,  and 
adds  heavily  to  costs  of  transportation.  There  has  been 
such  a  decrease  in  the  expense  of  traction  that  the  costs  of 
loading  and  unloading  have  become  a  proportionally  larger 
item  of  expense  than  formerly.  Many  kinds  of  bulky  freight 
cannot  bear  the  costs  of  reloading  .so  easily  as  a  higher 
tariff  by  rail. 

Again,  our  plan  results  in  the  execution  of  too  many 
works.  The  bill  of  1890  made  appropriations  for  435  works. 
Think  of  it,  435  works  to  be  carried  on  by  means  of  a 
bi-ennial  appropriation  of  $25,000,000  !  There  are  400  items 
in  the  bill  of  1892.  The  chief  of  engineers  has  often  opposed 
this  policy,  and  urged  Congress  to  undertake  fewer  works ; 
but  the  pressure  of  Congressmen  is  steadily  stronger  for 
more  works.*  The  bill  of  1892  provided  for  144  new  sur- 
veys, and  that  of  1890  for  203.  More  than  half  of  these  203 
proposed  works  were  declared  ' '  unworthy  of  improvement, ' ' 
and  of  those  declared  worthy  only  a  few  would  have  been 
recommended  by  the  chief  of  engineers.  The  House  Com- 
mittee, as  was  said  above,  recommended  appropriations  for 
twenty-eight  new  works  and  that  was  doubtless  too  many. 

The  practice  of  log-rolling  is  in  large  degree  responsible 
for  the  great  number  of  appropriations  for  rivers  and  harbors. 
Log-rolling  has  so  often  been  inveighed  against  that  no 
further  invectives  are  in  place  here  ;  indeed,  more  sins  have 
already  been  charged  up  to  the  practice  than  it  is  answerable 
for.  Less  money  is  doubtless  expended  on  works  of  purely 

*  Compare  this  with  the  following  statement  by  the  House  Committee  on  Rivers 
and  Harbors,  which  framed  the  bill  of  1892  :  The  pressure  for  river  and  harbor 
appropriations  was  never  before  as  great  as  that  which  the  committee  encoun- 
tered in  the  preparation  of  the  bill  reported,  and  if  the  committee  had  yielded  to 
half  of  the  demands,  many  of  which  were  urged  with  great  force  and  earnestness, 
the  bill  would  have  carried  many  millions  more  than  it  now  does. 


n8  ANNALS  OF  THE  AMERICAN  ACADEMY. 

local  benefit,  as  a  result  of  log-rolling,  than  is  generally 
claimed  ;*  it  is,  however,  a  most  undesirable  way  of  legislat- 
ing and  one  we  shall  find  hard  to  avoid  in  regard  to  river 
and  harbor  appropriations  as  long  as  we  continue  the  present 
plan  of  looking  to  the  representatives  in  Congress  instead  of 
to  the  administrative  branch  of  the  government,  as  the  real 
initiative  in  recommending  such  works  of  improvement ;  at 
least  as  long  as  the  representatives  continue  to  subordinate 
national  improvements  of  greater  commercial  importance  to 
local  ones  of  lesser  significance,  so  long  will  log-rolling  con- 
tinue. The  cure  consists  in  freeing  representatives  from  the 
pressure  at  present  exerted  on  them  to  work  for  improvements 
in  their  own  districts  whatever  be  the  relative  need  of  the 
same.  This  will  be  most  quickly  and  surely  secured  by 
holding  the  administrative  branch  of  the  government  to  a 
higher  degree  of  responsibility,  and  by  giving  it  greater 
power,  in  regard  to  the  improvement  of  inland  navigation. 
The  Secretary  of  War,  through  the  chief  of  engineers  > 
should  have  greater  influence,  by  means  of  reports  and  per- 
sonal attendance  on  the  sessions  of  the  committees  that  frame 
the  bill,  in  shaping  legislation.  Furthermore,  the  Secretary 
of  War  ought  to  have  greater  discretionary  power  as  to  the 
way  in  which  the  money  appropriated  shall  be  applied. 
When  President  Arthur  vetoed  the  river  and  harbor  bill  of 
1882,  he  recommended  that  Congress  authorize  the  Secretary 
of  War  and  the  President  to  spend  such  of  the  money  appro- 
priated as  they  thought  best,  the  restriction  being  imposed 
on  them  that  they  should  spend  money  only  on  the  objects 
named  in  the  bill,  and  that  they  should  spend  no  more  on  a 
particular  work  than  the  bill  authorized.  Whether  in  detail 
or  not,  in  principle  at  least,  this  recommendation  to  vest  the 
Secretary  of  War  with  greater  discretionary  power  in  the  out- 
lay of  money  which  has  been  appropriated  was  sound.  The 
Secretary  of  War,  aided  by  the  counsel  of  the  United  States 
engineers,  is  better  able  than  Congress  to  apply  the  money 

*  For  a  iustification  of  this  statementsee  the  author's  "  River  and  Harbor  Bills.'* 


THE  RIVER  AND  HARBOR  Biu,.  119 

granted  scientifically  and  economically  to  an  improvement. 
He  is  practically  free  from  local  influence,  is  subjected  to  but 
little  political  pressure,  his  only  object  can  be  the  wisest 
administration  of  his  department.  The  democratic  spirit  of 
Americans  is  chary  of  granting  much  power  to  the  executive. 
The  French  have  secured  great  advantages  from  giving  the 
executive  branch  of  the  government  extensive  powers  over 
inland  navigation.  To  a  large  extent  the  administrative 
part  of  our  government  is  still  undeveloped,  and  the  small 
discretionary  power  given  the  Secretary  of  War  over  the 
application  of  money  appropriated  to  improve  rivers  and 
harbors  is  but  one  instance  of  the  fact. 

The  most  objectionable  feature  of  our  river  and  harbor 
legislation  is  our  driblet  system  of  appropriations.  This  plan 
encourages  the  commencement  of  more  works  than  would 
otherwise  be  begun.  Congress  feels  freer  to  authorize  a 
work  when  the  immediate  appropriation  is  small.  The  brunt 
of  the  burden  is  thus  not  only  shifted  onto  future  legislators, 
but  becomes  greater  by  virtue  of  the  shifting.  River  and  harbor 
improvements  are  often  begun  and  left  for  sometime  in  an 
unfinished  state.  This  causes  a  great  waste  of  capital,  adding, 
in  some  cases,  from  twenty-five  to  fifty  per  cent  to  the  cost.* 
Driblet  appropriations  cause  another  waste  by  compelling 
engineers  to  adopt  unscientific  plans  in  executing  the  works. 
Many  engineering  projects  require  plans  reaching  through 
a  series  of  years  in  order  to  secure  satisfactory  results, 
Furthermore,  the  present  way  of  making  appropriations  often 
precludes  large  contracts  thus  adding  materially  to  final  costs. 
Z<astly  the  works  thus  constructed  at  increased  costs  begin 
to  be  useful  to  the  public  at  a  later  date.  The  investment 
does  not  yield  returns  so  soon  and  thus  becomes  so  much  less 
profitable. 

These  objections  to  partial  appropriations  are  realized  by 
Congress,  and  a  very  commendable  step  has  been  taken  to 
modify  our  way  of  making  grants  and  to  improve  on  old 

*  See  report  of  Senate  Committee  on  Commerce,  May  13,  1892. 


120          ANNAI^S  OF  THE  AMERICAN  ACADEMY. 

methods.  The  framers  of  the  bill  of  1890  tried  an  experi- 
ment. Without  actually  adopting  the  French  and  German 
plan  of  appropriating  at  once,  or  making  available  a  sum 
sufficient  to  enable  contracts  to  be  made  for  the  entire  com- 
pletion of  a  work,  they  hit  upon  a  way  of  reaching  the  same 
result.  The  limited  amount  which  could  be  taken  at  once 
from  the  Treasury  for  rivers  and  harbors  prevented  making 
lump  appropriations  for  works ;  so,  in  the  case  of  five  im- 
portant improvements — St.  Mary's  Falls  Canal,  the  Hay 
Lake  Channel,  Michigan  ;  the  harbors  of  Philadelphia,  Balti- 
more, and  Galveston — it  was  provided  ' (  That  such  contracts 
as  may  be  desirable  may  be  entered  into  by  the  Secretary 
of  War  for  the  completion  of  the  existing  project,  or  any 
part  of  the  same,  to  be  paid  for  as  appropriations  may  from 
time  to  time  be  made  by  law. ' '  The  result  was  a  saving  of 
from  ten  to  sixty-seven  per  cent  of  the  original  estimates  by 
means  of  continuing  contracts.  General  Casey,  chief  of 
engineers,  calculated  the  amount  saved  to  be  $5,000,000. 
"The  experiment  was  so  successful  that  the  principal  was 
applied  to  the  twelve  most  important  items  of  the  bill  of  July 
13,  1892.  The  Secretary  of  War  is  authorized  to  make 
contracts  for  the  completion  of  the  following  improvements : 
Harbor  of  Refuge,  Point  Judith,  R.  I.  ;  Charleston  Harbor, 
$.  C.  ;  Savannah  Harbor,  Ga.  ;  Mobile  Harbor,  Ala.  ; 
Humboldt  Harbor,  Cal.  ;  Hudson  River,  N.  Y.  ;  Ship 
Channel,  Great  Lakes  ;  canal  at  Cascades  of  Columbia  River, 
Ore.  ;  mouth  of  St.  John's  River,  Fla.  ;  Great  Kanawha 
River,  W.  Va.  In  the  case  of  the  improvements  of  the 
Missouri  River  and  the  Upper  and  Lower  Mississippi,  the 
appropriation  of  a  definite  amount  per  year  for  three  years 
beginning  July  i,  1893,  makes  possible  continuous  and  sys- 
tematic improvements.  Three  of  this  list  of  twelve  were 
added  to  the  bill  by  the  Senate,  the  Lower  Missouri  River, 
mouth  of  St.  John's  River  and  Great  Kanawha  River. 
The  amount  granted  by  the  bill  for  these  twelve  works  is 
$6,632,500,  or  about  thirty  per  cent  of  the  total  appropriated, 


THE  RIVER  AND  HARBOR  BILL.  121 

and  an  additional  maximum  sum  of  $31,755,521  is  author- 
ized by  the  bill  for  the  completion  of  the  work,  or  contin- 
uance as  in  the  case  of  the  Missouri  and  Mississippi  Rivers, 
during  the  next  three  years.  The  saving  because  of  this 
partial  change  in  our  policy  of  making  appropriations  will 
surely  be  large.  We  should  adopt  this  way  of  appropriat- 
ing for  all  works.  The  House  Committee,  which  framed 
the  bill  of  1892,  was  of  the  opinion  that  "had  this  policy 
been  adopted  a  dozen  years  ago,  it  would  have  resulted  in  a 
saving  to  the  government  in  the  matter  of  river  and  harbor 
improvements  of  $20,000,  ooo,  out  of  the  aggregate  appropri- 
ated in  that  time  for  such  work. ' ' 

The  River  and  Harbor  Bill  has,  on  the  whole,  been  more 
harshly  criticised  than  it  has  deserved.  It  is  true  that  the 
United  States  is  carrying  on  too  many  works;  that  log- 
rolling plays  too  great  a  r61e  in  legislation ;  that  the  influence 
of  the  United  States  engineers  and  the  Secretary  of  War  in 
deciding  what  works  shall  be  begun,  and  how  and  where  the 
money  appropriated  shall  be  applied,  is  too  small ;  and  that  our 
methods  are  often  unscientific  and  wasteful ;  still,  the  changes 
inaugurated  by  the  last  two  bills  are  important,  and  contain 
the  promise  of  further  progress.  The  importance  of  our 
inland  navigation  is  coming  home  to  us  more  and  more,  and 
the  demand  of  the  future  will  not  be  for  less  expenditure, 
but  for  greater ;  and  we  may  confidently  expect  these  in- 
creased appropriations  to  go  in  a  more  scientific  way  to  a 
smaller  number  of  works. 


CHAPTER  XI. 

THE   LEADING  WORKS   IN   PROCESS   OF  EXECUTION  WITHIN 
THE  UNITED  STATES.      PROPOSED   WORKS. 

The  United  States  is  pursuing  a  liberal  policy  in  the 
development  of  her  inland  waterways.  The  preceding  refer- 
ence to  the  River  and  Harbor  Bill  shows  that  this  liberality 
results  in  the  simultaneous  execution  of  a  large — indeed,  too 
large — number  of  works.  The  desirability  of  concentration 
of  effort  upon  the  more  important  improvements  has  been 
emphasized.  Of  these  larger  inland  commercial  routes  of 
the  United  States,  the  Mississippi  River,  the  Great  Lakes, 
the  waterways  by  which  they  have  been  and  are  to  be 
connected  and  extended  and  the  Nicaragua  Canal,  by  which 
the  east  and  the  west  shall  be  joined,  rank  first. 

The  improvement  of  the  Mississippi  River  is  under  the 
charge  of  the  Mississippi  River  Commission,  organized  by 
Act  of  Congress,  June  28,  1879,  and  consisting  of  seven 
members,  four  of  whom  are  United  States  engineers  and 
three  civilians.  The  importance  of  the  river  to  transporta- 
tion is  further  recognized  by  Congress  by  the  establishment 
of  standing  committees  to  look  after  its  needs.  The  House 
Committee  on  Levees  and  Improvement  of  the  Mississippi 
River  and  the  Senate  Committee  on  Improvement  of  the 
Mississippi  River  and  its  Tributaries  have  charge  of  legisla> 
tion  concerning  the  river.  With  the  improvement  of  the 
mouth  of  the  Mississippi  by  means  of  the  jetties  which 
Captain  Bads  successfully  completed  in  1879  every  one  is 
more  or  less  familiar.  The  works  of  improvement  at  present 
consist  mainly  in  the  construction  of  reservoirs  at  the  head 
waters  to  secure  water  for  release  during  the  season  when 
the  river  is  lowest,  in  the  construction  of  wing  dams  to 
confine  the  channel  and  cause  it  to  maintain  a  greater  depth , 
and  in  dredging  the  channels  and  harbors  of  the  river. 

(122) 


WORKS  IN  PROCESS  OF  EXECUTION.  123 

For  this  work  the  River  and  Harbor  Bill  of  1892  appro- 
priated $3,655,000  to  be  expended  on  the  Mississippi  River, 
exclusive  of  its  branches.  Of  its  tributaries,  the  Ohio, 
Cumberland,  Tennessee  and  Kentucky  rivers  alone  received 
$1,525,000.  The  bill  also  authorizes  contracts  to  be  entered 
into  by  the  Mississippi  River  Commission  that  may  entail  a 
maximum  expenditure  of  $12,870,000  during  the  next  three 
years. 

The  improvement  of  the  Missouri  River  is  likewise  under 
the  supervision  of  a  commission.  This  body  consists  of 
three  army  engineers  and  two  civilians.  The  commission 
is  improving  the  river  in  a  systematic  way  by  completing 
the  work  on  one  reach  after  another,  beginning  with  the 
mouth  of  the  stream  and  working  up.  The  bill  of  1892 
appropriates  $752,500,  and  authorizes  contracts  involving 
the  expenditure  of  $2,225,000  during  the  three  years  from 
1893  to  1896. 

The  most  important  item  in  the  bill  of  1892  is  the  appro- 
priation for  the  construction  of  "  a  ship  channel,  twenty  and 
twenty-one  feet  in  depth,  and  a  minimum  width  of  three 
hundred  feet  in  the  shallows  of  the  connecting  waters  of  the 
Great  Lakes  between  Chicago,  Duluth  and  Buffalo."  The 
total  cost  of  the  work  is  estimated  at  $3,340,000,  and  the 
bill  authorizes  the  United  States  engineers  to  enter  into  con- 
tracts for  completing  the  entire  work.  As  a  result  of  the 
urgent  demands  of  the  commercial  interests  of  the  West, 
Congress  provided  in  the  bill  of  1890  for  the  examination  of 
the  channels  connecting  the  lakes.  In  the  report  of  the  sur- 
vey by  Colonel  O.  M.  Poe,  who  is  the  engineer  in  charge  of 
the  improvements  of  the  Great  I/akes,  the  feasibility  and 
desirability  of  the  work  were  strongly  set  forth.  The  men 
most  interested  in  the  commerce  of  the  lakes  met  in  conven- 
tion at  Detroit,  December  17  and  18,  1891,  and  sent  a  memo- 
rial to  Congress  urging  it  to  authorize  the  work  and  to  make 
the  necessary  appropriation.  The  result  was  the  clause  in 
the  bill  of  1892,  to  which  reference  has  been  made.  The 


124  ANNANS  OF  THE  AMERICAN  ACADEMY. 

work  of  improving  the  harbors  of  the  Great  Lakes  is  being 
adequately  cared  for  by  liberal  appropriations  of  Congress. 

In  view  of  the  zeal  Congress  is  manifesting  in  the  improve- 
ment of  the  Great  Lakes  and  the  Mississippi  River,  it  is  sur- 
prising to  find  that  the  work  of  connecting  and  co-ordinating 
these  two  great  systems  of  inland  waterways  has  not  been 
correspondingly  pushed.  The  fullest  use  of  the  natural 
waterways  cannot  be  possible  as  long  as  they  are  connected 
by  such  an  inefficient  canal  as  the  Illinois  and  Michi- 
gan, extending  from  Chicago  to  La  Salle  on  the  Illinois 
River.  At  present  Lake  Michigan  is  connected  with  the 
Mississippi  River  by  this  canal  and  the  improved  Illinois 
River.  Congress  is  now  carrying  on  the  work  which  the 
State  of  Illinois  had  previously  begun,  of  canalizing  the 
Illinois  River.  "The  ultimate  object  of  this  improvement 
is  to  furnish  a  through  route  of  transportation  by  water  from 
the  southern  end  of  Lake  Michigan  to  the  Mississippi  River 
of  sufficient  capacity  for  its  navigation  by  the  largest  class 
of  Mississippi  River  steamboats  that  can  reach  the  mouth  of 
the  Illinois  River."*  The  United  States  has  also  begun  the 
construction  of  the  Illinois  and  Mississippi  (the  so-called 
Hennepin)  Canal  from  the  great  bend  of  the  Illinois  River 
near  the  town  of  Hennepin  to  the  mouth  of  Rock  River. 
This  canal  is  to  be  ninety-seven  miles  long,  eighty  feet  wide, 
seven  feet  deep,  and  with  locks  170  feet  long,  with  thirty- 
five  feet  in  width  of  lock  chamber,  and  is,  of  course,  to  be 
constructed  so  that  river  steamers  can  navigate  it.  This 
canal  will  shorten  the  water  route  from  Chicago  to  all  points 
north  of  the  mouth  of  the  Rock  River  by  419  miles,  will 
surely  increase  the  traffic  on  the  upper  Mississippi  and 
exercise  an  important  influence  as  regulator  of  the  freight 
charges  in  the  Upper  Mississippi  Valley  ;  that  is,  will  do  so 
as  soon  as  the  Illinois  and  Michigan  Canal  has  also  been 
reconstructed.  That  is  at  present  a  barge  canal  six  feet 

*  Report  of  Committee  on  Commerce,  U.  S.  Senate.  Report  No.  666,  Fifty-second 
Congress,  first  session,  p.  375. 


WORKS  IN  PROCESS  OF  EXECUTION.  125 

deep  and  sixty  feet  wide,  on  which  there  is  a  traffic  of  but 
1,500,000  tons  annually.  Boats  of  the  size  that  can  pass  the 
locks  of  the  Illinois  River  must  at  present  stop  at  La  Salle 
and  transfer  their  cargo  to  the  smaller  boats  of  the  Illinois 
and  Michigan  Canal.  It  is  to  be  hoped  that  the  enlargement 
of  this  waterway  will  not  be  long  delayed,*  and  that  the 
Illinois  and  Mississippi  Canal  will  be  put  through  as  soon  as 
possible. 

In  speaking  of  the  improvement  of  the  waterways  of  the 
Mississippi  Valley,  the  Ohio  River  and  its  branches,  the 
Kentucky,  the  Cumberland  and  the  Tennessee  deserve 
especial  notice.  The  large  amount  of  traffic  on  the  Ohio 
has  already  been  referred  to.f  Nearly  eight  million  dollars 
have  been  expended  on  the  river  since  1827,  when  the  first 
works  were  begun.  The  Ohio  is  967  miles  long,  and  is  at 
present  navigable  throughout  its  entire  length  for  coal  boats 
drawing  six  feet  of  water.  This,  however,  is  possible  for 
only  155  days  of  each  year  on  the  average.  The  proposed 
improvements  would  make  this  coal  traffic  possible  from 
one  to  three  months  longer  each  year.  Of  course,  the  ordi- 
nary smaller-draft  river  boats  can  navigate  the  stream 
throughout  the  season  of  navigation.  The  last  River  and 
Harbor  Bill  appropriated  $560,000  for  use  on  the  Ohio 
River. 

The  Kentucky,  Cumberland  and  Tennessee  rivers,  like  the 
Ohio  River,  flow  from  rich  lumber  and  mineral  regions 
through  fertile  agricultural  districts.  Steamboats  navigate 
the  Kentucky  to  Frankfort,  and  large  amounts  of  freight  are 
brought  down  the  river  from  the  Three  Forks  in  flat  boats. 
The  tonnage  on  the  Kentucky  in  1891  was  nearly  400,000 
tons — double  what  it  was  eight  years  ago.  The  existing 

*  Or  that  the  Chicago  drainage  canal,  now  being  constructed  to  connect  Chicago 
with  the  Illinois  River,  will  be  pushed  to  an  early  completion.  This  canal  is  to  be 
fed  by  the  waters  of  I^ake  Michigan,  is  to  drain  the  sewage  of  Chicago  into  the 
Illinois  River,  and  is  to  have  dimensions  that  will  make  it  navigable  for  lake  and 
river  boats, 

f  Videfupra,  page  45. 


126  ANNAI<S  OF  THE  AMERICAN  ACADEMY. 

project  has  for  its  object  a  slack- water  navigation  for  boats 
of  six  feet  draft.  Up  to  1890,  $1,163,077  had  been  expended ; 
$1,674,000  is  the  sum  estimated  as  required  to  complete  the 
work.  The  bill  of  1892  appropriated  only  $150,000  for  the 
purpose.  The  Cumberland  River  receives,  in  the  bill  of 
1892,  an  appropriation  of  $290,000  for  continuing  its  canali- 
zation. At  present  steamboats  of  three  feet  draft  ascend  the 
river  to  Point  Burnside,  Kentucky,  from  four  to  six  months 
of  the  year.  Steamboats  drawing  two  and  a  half  feet  run  to 
Carthage,  118  miles  above  Nashville,  from  six  to  eight 
months  of  the  year.  Below  Nashville  boats  drawing  sixteen 
inches  can  run  the  entire  year.  It  will  take  nearly  seven 
million  dollars  to  make  the  stream  navigable  for  larger  river 
boats  to  the  shoals  of  the  river,  337  miles  above  Nashville. 
Should  the  work  be  carried  out,  the  stream  will  surely 
become  of  large  commercial  importance. 

The  Tennessee  River  ranks  among  the  largest  of  the  forty- 
odd  tributaries  of  the  Mississippi.  The  stream  presents 
several  obstructions  to  navigation,  but  these  have  been 
partially  overcome,  so  that  the  river  is  navigable  for  a 
distance  of  650  miles  from  its  mouth.  On  the  456  miles 
below  Chattanooga  $3,180,877  had  been  expended,  previous 
to  1890,  in  blasting  and  dredging,  and  in  constructing  three 
canals,  with  a  total  length  of  twenty-four  miles,  to  overcome 
the  difficulties  of  navigating  the  shoals  and  rapids  of  the 
river.  By  the  last  River  and  Harbor  Bill,  $500,000  is 
appropriated  for  improvements  below  Chattanooga,  and 
$25,000  for  work  above  that  city.  For  completing  the  work 
below  Chattanooga,  it  is  estimated  that  $5,565,762  will  be 
required.  The  River  and  Harbor  Bill  of  1890  directed  a 
survey  to  be  made  of  the  Upper  Tennessee  from  Chattanooga 
to  the  junction  of  the  Holston  and  French  Broad  rivers,  a 
distance  of  188  miles.  It  is  estimated  that  a  three-foot 
channel  at  low  water  can  be  secured  by  expending  $650,000. 
There  are  at  present  fifty-two  steamers  plying  the  Tennessee. 
The  traffic  on  the  river  is  not  large,  but  must  certainly  become 


WORKS  IN  PROCESS  OF  EXECUTION.  127 

so  with  the  improvement  of  the  stream  and  with  the  develop- 
ment of  the  mining,  manufacturing  and  agricultural  indus- 
tries of  the  Tennessee  Valley. 

The  Hudson  River  is  receiving  extensive  improvements. 
This  is,  next  to  the  Mississippi,  the  most  important  navigable 
river  of  the  United  States.  It  has  a  three-fold  relation  to 
commerce.  For  a  hundred  miles  it  is  deep  enough  to  float 
the  large  ocean  ships,  it  has  the  largest  local  traffic  of  any 
river  of  its  length  in  the  United  States,  and  forms,  as  well,  a 
part  of  the  system  of  inland  waterways  that  terminate  in 
New  York.*  The  plan  of  improvement  entered  upon  in 
1867  provided  for  an  eleven  foot  channel  from  New  Baltimore 
to  Albany,  and  a  nine  foot  one  from  Albany  to  Troy.  Com- 
merce outgrew  these  dimensions,  and  the  River  and  Harbor 
Bill  of  1890  provided  for  the  appointment  of  a  board  of 
engineers  to  examine  and  report  on  three  projects  :  A  chan- 
nel from  New  York  to  Albany  for  sea-going  vessels  of 
twenty-foot  draft,  a  channel  of  like  dimensions  from  New 
York  to  Troy,  and  a  navigable  channel  of  twelve  feet  depth 
at  mean  low  water  from  New  York  to  Troy.  The  board  was 
of  ' '  the  opinion  that  the  possible  benefits  to  commerce  to  be 
derived  from  the  proposed  improvement  for  vessels  drawing 
twenty  feet  are  not  under  existing  conditions,  sufficient  to 
justify  at  this  time  the  expenditure  necessary  to  make  such 
improvement,"  but  "that  the  third  project  contained  in  the 
act  of  September  19,  1890,  which  provides  for  improving  the 
Hudson  River  '  between  Coxsackie  and  the  State  dam  at  Troy 
to  such  an  extent  as  to  secure  a  navigable  channel  twelve 
feet  deep  at  mean  low  water '  is  a  worthy  and  useful  one. ' ' 
The  estimated  cost  of  the  work  is  $2,447,000  ;  and  the  bill 
of  1893  authorizes  the  work,  makes  an  appropriation  of  $187,- 
500  to  begin  its  execution,  and  provides  for  making  con- 
tracts for  the  entire  project  to  be  paid  for  from  time  to  time  by 
succeeding  appropriations. 

Another  important  work  of  river  improvement  upon  which 

*  Cf.    Statistics  of  tonnage,  page  8. 


128          ANNALS  OF  THE  AMERICAN  ACADEMY. 

the  United  States  has  entered  is  the  canalization  of  the 
Columbia  River.  By  overcoming  the  obstruction  to  navi- 
gation presented  at  the  Cascades,  160  miles  from  the  ocean 
and  at  the  Dalles,  220  miles  from  the  sea,  the  Columbia 
River  can  easily  be  made  navigable  for  large  river  steamers 
through  a  distance  of  1032  miles,  of  which  752  are  in  the 
United  States.  Its  tributaries,  the  Williamette,  the  Snake 
and  other  rivers,  can  be  made  to  add  600  miles  more  of  navi- 
gation. The  Columbia  may  justly  be  regarded  as  the 
Mississippi  of  the  West.*  The  bar  at  the  mouth  of  the 
river  has  just  been  removed  by  the  construction  of  a  jetty 
that  secures  a  channel  thirty  feet  deep.  The  lower  Colum- 
bia and  the  Williamette,  below  Portland,  now  have  channels 
twenty  feet  deep,  and  the  River  and  Harbor  Bill  of  1892 
appropriates  $150,000  to  be  applied  to  obtain  a  twenty-five 
foot  channel.  It  will  not  be  long  before  the  large-sized 
ocean  ships  will  unload  their  cargoes  at  the  docks  of  Port- 
land, no  miles  from  the  sea.  The  Cascades  of  the 
Columbia  are  about  four  and  a  half  miles  in  length,  the 
river  having  a  fall  of  forty-five  feet  at  high  water.  The 

*  Very  few  people  living  in  the  Mississippi  Valley  and  the  Eastern  States  have 
any  adequate  conception  of  the  extent  and  fertility  of  the  region  drained  by  the 
Columbia  River  system.  The  following  sentences  taken  from  the  report  of  the 
Senate  Committee  on  Transportation  Routes  to  the  Sea.  submitted  February  8, 
1892,  are  instructive  :  "  The  Columbia  River  and  its  tributaries  drain  a  region  of 
country  unsurpassed,  if  indeed  equaled,  in  agricultural,  grazing  and  mineral 
productiveness  by  any  area  of  equal  size  on  the  habitable  globe  ;  a  region,  in  so 
far  as  it  relates  to  its  agricultural  aspects,  susceptible  of  the  highest  degree  of 
cultivation,  and  of  producing  crops  of  cereals,  especially  wheat,  unprecedented  in 
both  quantity  and  quality  by  the  product  of  the  most  highly  cultivated  fields  of 
the  choicest  cereal  producing  lands  in  the  civilized  world,  while  its  facilities  for 
grazing  and  fruit  growing,  its  timber,  mineral  resources  of  gold,  silver,  lead,  coal, 
and  other  valuable  minerals  can  scarcely  be  properly  or  accurately  described 
without  seeming  exaggeration. 

"  Nor  is  this  area  by  any  means  insignificant  in  geographical  extent.  It  is  equal 
in  extent  to  over  one-fifteenth  of  the  entire  area  of  the  United  States ;  over  one- 
fourth  of  the  aggregate  areas  of  all  the  republics  of  South  America  ;  larger  than 
all  of  the  six  New  England  States,  with  all  the  Middle  States  and  Maryland, 
Virginia  and  West  Virginia  thrown  in.  It  is  twice  the  size  of  Great  Britain  and 
Ireland. 

"  The  Columbia  River  drains  an  area  of  about  345,3^5  square  miles.  The  Snake 
River  alone,  the  principal  tributary  flowing  into  it  over  three  hundred  miles  from 
the  sea,  drains  an  area  of  105,000  square  miles." 


WORKS  IN  PROCESS  OF  EXECUTION.  129 

obstruction  to  navigation  is  being  overcome  by  the  construc- 
tion of  a  lock  and  a  canal  3000  feet  long.  The  River  and 
Harbor  Bill  of  1892,  authorized  contracts  for  its  completion 
at  a  further  cost  not  to  exceed  $1,745,000.  The  obstruc- 
tions at  the  Dalles  are  nearly  twelve  miles  long  and  the  entire 
fall  of  the  river  in  this  distance  is  eighty-one  and  a  half  feet 
at  low  water.  The  expenses  of  overcoming  these  difficulties 
will  necessarily  be  large.  By  the  River  and  Harbor  Act  of 
1888,  the  Secretary  of  War  was  directed  to  appoint  a  board 
of  three  engineers  from  the  United  States  army  to  report  on 
the  best  method  of  improving  the  river.  The  board  was  of 
opinion  that  a  canal  with  locks  would  cost  more  than  the 
commerce  of  the  river  warranted,  and  reported  in  favor  of 
the  construction  of  two  hydraulic  lifts,  one  near  the  lower 
end  of  the  Dalles  and  one  near  the  upper  end.  The  boats 
were  to  be  conveyed  from  one  lift  to  the  other  by  means  of  a 
boat  railway  eight  miles  long.  The  lifts  and  railway  were 
to  be  large  enough  to  handle  boats  165  feet  long,  with  thirty- 
eight  feet  beam,  and  five  feet  draft,  and  weighing,  together 
with  cargo,  600  tons.  The  estimated  cost  of  structure  and 
equipment  for  passing  eight  boats  each  way  in  twelve  hours 
was  $2,860,356.55,  and  at  an  added  outlay  of  $716,000,  forty 
boats  could  be  passed  each  way  in  twenty-four  hours.  The 
plan  was  not,  however,  accepted  by  Congress,  and  the  River 
and  Harbor  Bill  of  1892  authorizes  the  President  to  appoint 
a  board  of  engineers  to  consist  of  seven  members,  three  of 
whom  shall  be  civilians,  to  re-examine  the  obstruction  to 
navigation  at  the  Dalles  and  to  report  on  the  best  method  of 
overcoming  them. 

One  of  the  principal  canal  constructions  now  in  process  of 
execution  is  the  enlargement  of  the  Chesapeake  and  Dela- 
ware Canal  into  a  waterway  for  ocean  ships.  This  work  is 
being  carried  on  by  a  private  company  and  not  by  the  gov- 
ernment. 

These  are  some  of  the  more  important  works  now  being 
executed,  besides  them  are  several  proposed  works  of  which 


130  ANNALS  OF  THE  AMERICAN  ACADEMY. 

mention  ought  to  be  made.  As  is  to  be  expected  the  larger 
works  that  are  being  discussed  are  those  whose  purpose  is  to 
extend  the  greatest  of  all  natural  inland  waterways,  the 
Great  Lakes.  Probably  one  of  the  first  lake-ship  canals 
constructed  will  connect  Pittsburgh  with  Lake  Brie.  Pitts- 
burgh and  the  neighboring  district  now  does  an  annual  busi- 
ness with  the  lakes  to  the  extent  of  about  5,000,000  tons  of 
iron  ore  and  2,000,000  tons  of  coal.*  The  industries  about 
the  Great  Lakes  obtain  most  of  their  coal  from  Pennsylvania. 
At  present  this  is  shipped  to  the  lake  by  rail  and  then  trans- 
ferred to  boats.  In  1889  the  State  of  Pennsylvania  appointed 
a  commission  to  report  on  the  feasibility  of  a  ship  canal. 
It  reported  such  a  work  to  be  possible  of  construction,  and 
suggested  a  waterway  by  way  of  the  Beaver  River,  to  be  103 
miles  long,  152  feet  wide  at  the  surface  and  15  feet  deep,  with 
50  locks,  300  feet  long  by  45  feet  in  width.  The  estimated 
cost  is  $27,000,000.  The  Senate  of  the  United  States  passed 
a  bill  authorizing  a  survey  to  be  made  of  a  canal  route  from 
the  lake  to  Pittsburgh,  but  the  bill  failed  in  the  House. 
Should  such  a  waterway  be  put  through,  and  Pittsburgh 
will  hardly  rest  content  till  she  becomes  a  lake  port,  it  is 
probable  that  the  canal  will  be  given  greater  depth  than 
fifteen  feet  and  be  constructed  with  less  than  fifty  locks. 

Mention  was  made  on  page  13  of  the  formation  of  the 
Minnesota  Canal  Company  for  the  purpose  of  constructing  a 
waterway  from  St.  Paul  and  Minneapolis  to  Lake  Superior. 
The  desire  for  cheaper  coal  is  the  chief  reason  for  the  forma- 
tion of  the  company.  At  present  the  freight  per  ton  of 
anthracite  coal  from  Buffalo  is  $1.80,  with  a  lake-ship  canal 
to  St.  Paul  and  Minneapolis  the  rate  can  be  reduced  to  eighty 
cents.  The  millers  of  Minneapolis  and  the  farmers  of  Min- 
nesota and  the  Dakotas  would  be  greatly  benefited  by  the 
extension  of  lake  commerce  to  these  important  manufacturing 
and  distributing  centres. 

*  Cf.  Report  by  Roberts  on  "  Uses  of  Waterways  and  Railways,"  to  Fifth  Inter- 
national Congress  on  Inland  Navigation. 


WORKS  IN  PROCESS  OF  EXECUTION.  131 

The  connection  of  the  Great  Lakes  with  the  ocean  is  a 
work  that  has,  very  naturally,  been  frequently  considered  as 
the  commerce  on  the  Great  Lakes  has  developed.  A  lake 
and  ocean-ship  waterway  between  the  Great  Lakes  and  the 
ocean  is  a  natural  sequence  of  the  twenty-foot  channel  for  the 
lakes.  Canada  is  now  actively  improving  the  St.  Lawrence 
and  Welland  canal  route,  and  giving  them  the  depth  of 
fourteen  feet.  When  this  work  was  begun  that  was  the  draft 
of  lake  vessels,  but  in  the  future  they  are  to  draw  twenty 
feet.  The  costs  of  a  deep  canal  through  the  United  States 
are  unknown,  no  surveys  have  been  made.  Until  that  has 
been  done,  it  will  be  impossible  to  discuss  the  subject  in- 
telligently. All  admit  the  great  importance  which  a  deep- 
water  channel  to  the  sea  would  have.  The  commerce  of  the 
Great  Lakes  is  enormous,  and  would  be  greatly  increased  by 
having  outlet  to  the  sea. 

There  has  been  a  good  deal  of  discussion  whether  the  deep- 
water  channel  to  the  sea  should  pass  by  way  of  the  St.  Law- 
rence River  or  from  the  lakes  to  New  York  City ;  but  the 
question  seems  clearly  to  have  but  one  answer  as  far  as  the 
United  States  is  concerned.  However  desirable  it  may  be 
for  Canada  to  have  deep-water  communication  between  her 
western  territory  and  Quebec,  Montreal  and  her  other  eastern 
cities,  and  however  important  it  may  be  for  Canada  to  have 
a  water  route  from  Canadian  fields,  forests,  mines  and  shops 
to  Liverpool  and  other  markets  of  Europe,  the  case  with  us 
still  remains  different.  Our  concern  is  primarily  to  connect 
the  Great  Lakes  with  the  great  cities  of  the  eastern  States. 
They  are  our  chief  markets,  trade  with  England  is  desirable, 
but  it  has  only  a  secondary  importance.  The  traffic  on  the 
Welland  Canal  is  comparatively  light ;  in  1 890  it  was  only 
960,020  tons,  or  about  one- third  that  on  the  smaller,  essen- 
tially barge- traffic,  Erie  canal.  The  St.  Lawrence  route 
would  not  only  have  less  commercial  value  for  us,  but  it 
would  increase  rather  than  lessen  our  commercial  and  indus- 
trial dependence.  Our  political  relations  with  Canada  and 


132  ANNALS  OF  THK  AMERICAN  ACADEMY. 

England  would  be  injured  by  such  a  waterway.  We  should 
have  about  1400  miles  of  coast  line  from  which  our  ocean 
cruisers  and  men-of-war  could  be  excluded.  As  long  as 
Canada  remains  a  dependency  of  Great  Britain,  our  com- 
mercial and  political  interests  will  remain  opposed  to  hers. 

Two  other  canal  projects  have  been  mooted  not  a  little — 
the  construction  of  a  waterway  for  lake  ships  and  river  boats 
between  Cincinnati  and  Lake  Erie,  and  an  ocean-ship  canal 
between  Philadelphia  and  New  York  City.  A  bill  was 
passed  by  the  Senate  of  the  Fifty-second  Congress  directing 
surveys  of  these  routes  to  be  made,  but  the  bill  did  not  get 
through  the  House.  Concerning  the  importance  which  the 
canal  between  America's  great  commercial  city  and  her 
greatest  manufacturing  city  would  have,  there  can  be  no 
doubt.  Such  a  waterway  will  doubtless  be  constructed  in 
the  not  distant  future,  either  by  the  government  or,  as  is 
more  probable,  by  private  capital. 

The  greatest  of  all  canals  now  in  process  of  construction, 
whether  domestic  or  foreign  trade  be  considered,  is  the 
Nicaragua.  Its  importance  makes  it  merit  a  separate 
chapter. 


CHAPTER  XII. 

THE   NICARAGUA   CANAL. 

The  Nicaragua  Canal  is  as  much  an  inland  waterway  of 
the  United  States,  as  regards  a  large  part  of  the  commercial 
service  it  will  perform,  as  it  would  be  were  it  to  extend  across 
the  country  from  New  York  to  San  Francisco.  Its  function 
as  an  agent  of  domestic  commerce  is  to  connect  the  Pacific 
Slope  with  the  Gulf  States,  the  Mississippi  Valley,  and  the 
Atlantic  States.  It  connects  the  rivers  of  the  Valley  of  the 
Columbia  with  the  Mississippi  system  just  as  truly  as  the 
canals  across  Illinois  are  to  furnish  an  efficient  waterway  from 
the  Mississippi  to  the  Great  Lakes.  As  the  commerce  of 
the  Mississippi  will  be  increased  by  this  water  route  from 
Chicago  to  La  Salle  and  Rock  Island,  so  to  a  large  degree 
does  the  commercial  usefulness  of  the  Mississippi  and 
Columbia  systems  depend  on  the  Nicaragua  Canal.  The 
waterway  will  be  an  equally  important  route  for  the  movement 
of  our  coast- wise  traffic,  as  distinct  from  the  strictly  inland 
traffic  ;  it  will  be,  as  President  Hayes  said,  ' '  virtually  a  part 
of  the  coast  line  of  the  United  States. ' '  Besides  this  it  will 
become  an  important  highway  for  the  foreign  commerce  of 
our  own  country  and  of  the  other  nations  of  the  world.  It 
will,  then,  be  a  waterway  performing  the  three-fold  func- 
tions of  a  route  for  inland,  coastwise  and  foreign  commerce, 
and  these  functions  determine  how  the  canal  should  be  con- 
trolled and  administered.  The  first  two  of  these  decide  that 
the  United  States  should  control  the  waterway,  the  third 
that  the  United  States  in  controlling  the  administration  of 
the  canal  must  maintain  the  neutrality  of  the  waterway  for 
the  ' '  impartial  and  innocent  use  ' '  of  all  nations. 

Whoever  constructs  the  Nicaragua  Canal,  be  it  the  United 
States  directly  or  a  company  chartered  by  our  own  or  some 
other  government,  the  United  States  must  control  the  water- 
way. Our  commercial  interests  in  the  canal  are  so  much 
greater  than  those  of  any  other  nation  that  it  would  be  pre- 

(i33) 


134  ANNANS  OF  THE  AMERICAN  ACADEMY. 

judicial  to  our  welfare  to  allow  any  other  State  to  dominate  this 
artery  of  commerce.  Military  considerations  are  hardly  infer- 
ior to  commercial,  and  emphasize  not  only  the  necessity  for  the 
construction  of  the  canal  but  also  the  reason  why  the  water- 
way should  be  under  American  control.  Without  the  canal 
our  Pacific  coast  is  separated  from  our  Atlantic  seaboard  by 
nearly  15,000  miles,  and  in  order  to  protect  both  sides  of  our 
country  from  attack  we  have  to  maintain  a  fleet  on  each 
ocean.  With  a  canal,  but  under  control  of  a  foreign  nation, 
our  military  position  would  be  essentially  the  same.  * 

There  is  nothing  in  our  present  treaty  relations  with 
foreign  powers  to  prevent  us  from  controlling  the  Nicaragua 
Canal.  Whoever  constructs  the  canal,  some  great  power 
must  assure  its  neutrality  ;  Nicaragua  and  Costa  Rica  are 
too  weak  to  do  this ;  the  superiority  at  present  of  our 
interests  in  the  waterway  makes  us  the  natural  beneficiary 
of  this  right  to  maintain  the  canal  as  a  neutral  highway. 
By  our  treaties  there  is  nothing  to  prevent  the  United  States 
from  aiding  a  corporation  to  build  the  canal;  but,  more  than 
this,  the  United  States  to-day  clearly  has  the  right  to  nego- 
tiate with  Nicaragua  and  Costa  Rica  for  the  purpose  of 
obtaining  for  herself  a  right  of  way  through  Nicaragua, 
and  the  privilege  of  constructing  the  waterway  directly  with- 
out the  intervention  of  a  corporation,  f  In  other  words,  the 
Clayton-Bulwer  Treaty  of  1850  is  defunct. 

*Cf.  President  Hayes'  message  to  Congress,  March  8,  1880:  "  An  interoceanic 
canal  across  the  isthmus  will  essentially  change  the  geographical  relations  between 
the  Atlantic  and  Pacific  coasts  of  the  United  States,  and  between  the  United  States 
and  the  rest  of  the  world.  It  will  be  the  great  ocean  thoroughfare  between  our 
Atlantic  and  Pacific  shores,  and  virtually  a  part  of  the  coast  line  of  the  United 
States.  Our  mere  commercial  interest  in  it  is  greater  than  that  of  all  other 
countries,  while  its  relation  to  our  power  and  prosperity  as  a  nation,  to  our  means 
of  defence,  our  unity,  peace,  and  safety,  are  matters  of  paramount  concern  to  the 
people  of  the  United  States.  No  other  great  power  would,  under  similiar  circum- 
stances, fail  to  assert  a  rightful  control  over  a  work  so  closely  and  vitally  affecting 
its  interest  and  welfare." 

f  It  would  be  foreign  to  the  essentially  economic  purpose  of  this  monograph  to 
go  more  than  briefly  into  this  question.  The  argument  is  merely  outlined.  For  a 
fuller  discussion  of  the  matter,  consult  the  report  of  the  Senate  Committee  on 
Foreign  Relations,  No.  1944,  Fifty-first  Congress,  second  session  ;  also,  speech  by 
Senator  Frye,  Congressional  Record,  Fifty-second  Congress,  second  session,  vol. 
xxiv  ,  p  1630  ;  and  speech  by  Senator  Morgan,  same  volume,  p.  1685. 


THE  NICARAGUA  CANAL.  135 

By  the  Clay  ton- Bui  wer  Treaty,  England  and  the  United 
States  expressed  ' '  their  views  and  intentions  with  reference 
to  any  means  of  communication  by  ship  canal ' '  across  the 
isthmus.*  The  treaty  was  called  forth  by  our  acquisition 
of  a  large  territory  from  Mexico  just  before  1850,  and  by 
the  discovery  of  gold  in  the  newly-acquired  territory.  A 
canal  across  the  isthmus  was  much  discussed,  and  seemed 
about  to  be  realized  in  the  near  future.  By  the  convention 
it  was  agreed  that  neither  nation  should  ever  obtain  exclu- 
sive control  over  the  canal,  or  ' '  colonize  or  assume  or  exer- 
cise any  domain  over  Nicaragua,  Costa  Rica,  the  Mosquito 
Coast,  or  any  part  of  Central  America"  It  provided 
against  there  being  any  time  lost  in  commencing  the  con- 
struction of  the  canal ;  either  nation  might  give  its  support 
and  encouragement  to  any  persons  of  sufficient  capital  who 
might  offer  to  undertake  the  work  ;  the  two  nations  were  to 
defend  the  neutrality  of  the  canal,  the  privilege  being 
reserved  of  withdrawing  such  guaranty  on  notice. 

"  The  convention  of  1850  has  become  obsolete,  "f  and  for 
several  reasons.  In  the  first  place,  the  contracting  parties 
looked  forward  to  the  immediate  construction  of  the  canal, 
but  forty-three  years  have  now  passed  and  the  only  action 
that  has  been  taken  by  either  nation  was  the  act  of  the 
United  States  Congress,  in  1889,  chartering  the  Maritime 
Canal  Company  of  Nicaragua.  During  this  time  important 
political  and  economic  events  have  put  a  new  phase  on  the 
matter.  England  has  not  lived  up  to  the  agreements  of  the 
treaty.  When  the  convention  was  made  there  existed  a 
company  of  English  subjects  at  Balize,  Spanish  territory, 
whom  the  Spanish  government  had  licensed  to  cut  timber. 
In  1853,  this  settlement  of  licensed  wood-cutters  organized 
a  legislative  assembly  ;  in  1859,  Great  Britain  negotiated  a 

*  Cf.  Rhodes  :  "  History  of  the  United  States  from  the  Compromise  of  1850.  " 
Vol.  i  ,  pp.  199-202. 

t  Quoted  from  the  report  of  the  Senate  Committee  on  Foreign  Relations,  January 
TO,  1890.  John  Sherman  was  the  chairman  of  the  committee,  and  George  F. 
Kdmunds  and  Wui.  M.  Evarts  were  two  of  the  other  members. 


136  ANNALS  OF  THE  AMERICAN  ACADEMY. 

treaty  with  Guatemala  to  establish  the  boundaries  between 
"Her  Majesty's  settlement  and  possessions  in  the  Bay  of 
Honduras  ' '  and  the  territories  of  Guatemala.  Three  years 
later  England  declared  the  settlement  a  colony  and  gave  it  a 
colonial  government.  All  this  was  done  by  Great  Britain 
after  she  had  agreed  not  to  *  *  colonize  or  assume  or  exercise 
any  dominion  over  .  .  .  any  part  of  Central  America. ' ' 
The  United  States,  in  1867,  made  a  treaty  with  the  republic 
of  Nicaragua,  in  which  the  United  States  secured  for  its 
citizens  the  right  of  transit  between  the  two  oceans,  in 
common  with  the  citizens  of  Nicaragua,  on  an}r  route  that 
might  be  constructed.  Nicaragua  made  a  similar  treaty 
with  France  and  with  England  ;  but  in  1884  we  decided  to 
take  a  further  step.  President  Arthur  negotiated  a  treaty 
with  Nicaragua  that  gave  the  United  States  the  suzerainty, 
though  not  absolute  sovereignty,  over  a  strip  twelve  miles 
wide  through  Nicaragua.  The  United  States  was  to  con- 
struct the  canal,  and  was  to  defend  the  sovereignty  of 
Nicaragua  and  to  secure  to  the  Central  American  States  the 
benefits  of  the  waterway.  The  treaty  did  not  secure  the 
necessary  two-thirds  majority  of  the  Senate ;  but  might 
have  obtained  it  on  reconsideration  had  not  President  Cleve- 
land withdrawn  the  treaty  because  it  was  ' '  coupled  with 
absolute  and  unlimited  engagements  to  defend  the  territorial 
integrity  of  the  States  where  such  interests  lie."  This 
treaty,  of  course,  assumed  that  the  Clayton-Bulwer  conven- 
tion had  been  abandoned  by  tacit  consent  of  the  contracting 
parties  ;  and  such  is  in  reality  the  case.  There  has  been  no 
objection  made  by  European  powers  to  the  efforts  of  the 
United  States  to  promote  the  construction  of  the  canal  ; 
England  has  not  carried  out  the  stipulations  of  the  treaty, 
and  the  commercial  and  economic  conditions  have  so  changed 
since  1850  that  the  United  States  would  not  now  think  of 
agreeing  to  such  a  treaty  as  she  then  entered  into.  Since 
that  time  the  Suez  Canal  has  been  put  through  and  has 
passed  under  the  control  of  England.  England's  commercial 


THE  NICARAGUA  CANAI,.  137 

supremacy  is  secure  against  our  competition,  and  will  con- 
tinue so  until  we  find  a  shorter  route  to  the  western  coast 
of  South  America  and  to  the  lands  beyond  the  Pacific.  But 
what  has  done  most  to  change  our  attitude  toward  the  Nica- 
ragua Canal  is  the  rapid  development  of  the  States  on  the 
Pacific.  The  imperative  need  of  cheaper  transportation 
between  the  eastern  and  western  parts  of  the  United  States 
that  arises  from  the  differences  in  the  industrial  character 
of  the  two  regions  has  made  the  Nicaragua  Canal  essen- 
tially a  part  of  the  inland  transportation  routes  of  the  United 
States. 

It  is  not  our  privilege  alone,  but  our  duty  as  well,  to  exer- 
cise political  control  over  the  Nicaragua  Canal,  both  for 
the  reason  already  given  that  we  are  the  only  nation  of 
the  .Western  Hemisphere  that  is  strong  enough  to  do  this, 
and  more  because  of  the  course  which  events  have  taken 
since  1885.  The  rejection  of  the  treaty  of  1884  was  inter- 
preted by  the  American  promoters  of  the  canal  and  by  the 
Nicaraguan  government  as  meaning  that  the  United  States 
did  not  intend  to  undertake  the  construction  of  the  water- 
way ;  thus  on  the  third  of  December,  1886,  Messrs.  Daly, 
Stout,  Hotchkiss,  Taylor,  Billings,  Crowninshield,  Hitch- 
cock, Miller  and  Menocal  organized  the  Nicaragua  Canal 
Association  for  the  purpose  of  obtaining  the  concession  of  a 
right  of  way  for  the  construction  of  a  ship  canal  through 
Nicaragua.  Mr.  A.  G.  Menocal  carried  on  the  negotiations, 
and  obtained  the  concessions,  April  24,  1887.  I*  was  now 
necessary  to  find  or  establish  a  corporation  to  undertake  the 
construction  of  the  work  ;  accordingly,  the  Nicaragua  Canal 
Construction  Company  was  incorporated  June  10,  1887, 
under  the  laws  of  Colorado,  with  a  capital  fixed  at  $12,000,- 
ooo.  Then  on  the  twelfth  of  August,  1887,  the  Nicaragua 
Canal  Association  turned  over  to  the  Nicaragua  Canal  Con- 
struction Company,  in  consideration  for  $11,998,000  of  the 
latter  company's  capital  stock,  the  Nicaraguan  concession 
and  all  the  rights  and  property  arising  from  its  possession. 


138          ANNALS  OP  THE  AMERICAN  ACADEMY. 

The  association,  however,  retained  the  right  to  organize  the 
Maritime  Canal  Company  of  Nicaragua  in  the  future.  The 
chief  object  of  the  association  was  to  have  the  canal  begun, 
thus  it  turned  back  into  the  treasury  of  the  construction 
company,  as  a  gift,  six  millions  of  the  stock  it  had  just  re- 
ceived, and  the  construction  company  raised  money  by  the 
sale  of  this  stock  to  begin  the  work.  Upon  the  arrival  of 
the  engineering  party  at  Grey  town,  in  Nicaragua,  Costa  Rica 
protested  that  the  canal  could  not  be  constructed  over  the 
proposed  route  without  her  consent,  because  of  the  rights 
she  possessed  to  the  use  of  the  port  at  Grey  town  and  to  the 
navigation  of  the  San  Juan  River,  which  had  been  secured 
to  her  by  the  treaty  of  1858  with  Nicaragua.  Nicaragua 
denied  Costa  Rica' s  claim  ;  the  question  was  arbitrated  by 
President  Cleveland,  and  decided  in  favor  of  Costa  Rica. 
The  Nicaragua  Canal  Association  then  obtained  the  neces- 
sary concession  of  right  of  way  from  Costa  Rica,  August  9, 
1888,  and  turned  this  also  over  to  the  construction  company. 
The  following  year,  May  24,  1889,  was  when  this  transfer 
took  place.  Previous  to  this  the  United  States  Congress  had 
passed  an  act,  approved  February  20,  1889,  incorporating 
the  Maritime  Canal  Company  of  Nicaragua,  a  body  consist- 
ing essentially  of  the  same  men  as  composed  the  construc- 
tion company,  and  having  its  headquarters  in  New  York 
City.  This  company  was  the  successor  of  the  association ; 
its  president  is  Hiram  Hotchkiss,  of  New  York.  On  the 
twenty-fourth  of  May,  1889,  the  Nicaragua  Canal  Con- 
struction Company  transferred  to  the  Maritime  Canal 
Company  of  Nicaragua,  the  two  concessions  given  by 
Nicaragua  and  Costa  Rica,  together  with  the  rights  and 
property  which  their  possession  had  conveyed,  receiving 
as  a  remuneration  $12,000,000  in  full  paid-up  shares  of 
the  capital  stock  of  the  Maritime  Canal  Company.  The 
construction  company,  of  which  ex-Senator  Warner  Millet- 
is  the  president,  then  at  once  organized  and  sent  out  an 
expedition  for  beginning  the  work  of  construction.  The 


THE  NICARAGUA  CANAL.  139 

party  arrived  at  San  Juan  del  Norte,  or  Greytown,  June  3, 
1889,  and  since  then  the  work  has  gone  more  or  less  steadily 
onward. 

These  events  have  changed  the  political  relations  of  the 
United  States  to  the  canal.  The  Maritime  Canal  Company 
of  Nicaragua  consists  of  American  citizens  ;  to  this  body  of 
Americans  Nicaragua  and  Costa  Rica  have  granted  the  right 
to  construct  the  interoceanic  waterway  ;  this  company  is 
chartered  by  the  United  States  government,  and  in  its  stock 
Nicaragua  and  Costa  Rica  are  each  shareholders. 

Surveys  for  the  location  of  the  canals  were  carried  on  by 
Mr.  Menocal,  who  has  been  the  chief  engineer  of  the 
Nicaragua  Canal  Construction  Company  since  its  organiza- 
tion. His  first  survey  was  made  in  1872,  and  the  line  of  the 
canal  as  finally  located  by  him  runs  from  Greytown  on  the 
Caribbean  Sea  to  Brito  on  the  Pacific  coast,  by  the  way  of  the 
San  Juan  River  and  Lake  Nicaragua.  Lake  Nicaragua  is 
about  one  hundred  miles  long,  has  an  average  width  of  about 
forty-five  miles,  and  is  of  variable  depth,  reaching  a  maxi- 
mum of  165  feet.  The  surface  of  the  lake  is  1 10  feet  above 
the  sea  level.  Its  western  bank  approaches  within  twelve 
miles  of  the  Pacific,  from  which  it  is  separated  by  a  divide 
forty-two  feet  high. 

As  concisely  described*  by  Mr.  Menocal,  "The  total  distance  from 
ocean  to  ocean  by  sailing  line  through  canal  and  lake  is  169.45  miles, 
of  which  but  26.78  miles  will  be  wholly  in  excavation,  the  other  142.67 
miles  being  through  Lake  Nicaragua,  the  San  Juan  River  and  artificial 
basins.  Of  the  latter  distance,  102  miles  will  have  a  depth  of  thirtv 
feet  or  more,  requiring  neither  dredging  nor  excavation.  The  lake  is 
the  main  feeder  and  the  summit  level  of  the  canal.  It  is  connected 
with  the  Pacific  Ocean  by  11.40  miles  of  canal  in  excavation  and  5.27 
miles  of  artificial  basin  created  in  the  valley  of  Tola  by  the  construc- 
tion of  a  dam  across  a  narrow  gorge  of  the  valley,  three  miles  distant 
from  the  Pacific  coast.  From  the  lake  eastward  the  canal  follows  the 
San  Juan  River  for  a  distance  of  64^  miles  to  Ochoa,  where  by  the 
construction  of  a  dam  across  the  river  the  surface  of  the  water  is  raised 

*  Cf.  Senate  Report  No.  1944,  Fifty-first  Congress,  second  session,  pp.  170,  171, 
statement  of  A.  G.  Menocal. 


140          ANNANS  OF  THE  AMERICAN  ACADEMY. 

fifty-five  feet  and  slack-water  navigation  secured  along  that  distance, 
converting  that  portion  of  the  river  into  an  extension  of  the  lake. 
Just  above  the  dam  the  canal  leaves  the  bed  of  the  river  and  enters 
into  a  chain  of  artificial  basins  formed  by  the  construction  of  a  series 
of  dams  and  embankments  and  short  cuts,  confining  and  connecting 
adjacent  valleys  (of  the  San  Francisco  Creek)  for  a  distance  of  about 
twelve  miles  to  the  western  end  of  the  great  divide  cut.  The  heaviest 
v/ork  in  the  whole  line  is  now  encountered  in  crossing  the  divide 
separating  the  valleys  of  the  San  Francisco  and  Deseado  Creeks,  where 
nearly  eleven  million  cubic  yards  of  rock  and  earth  excavation 
are  concentrated  in  a  distance  of  two  and  three-fourths  miles.  How- 
ever, the  rock  is  hard  and  homogeneous,  there  are  ample  natural 
facilities  for  doing  the  work  ;  the  rock  is  needed  for  the  construction 
of  breakwaters,  locks,  dams,  embankments,  etc.,  and  if  not  found  in 
that  favorable  centre  of  distribution  it  would  have  to  be  quarried  at 
other  places.  Easterly  of  the  divide  cut  there  is  another  artificial 
basin  about  five  miles  long,  formed  by  the  construction  of  a  dam 
across  the  valley  of  the  Deseado,  and  thence  twelve  miles  of  canal  in 
excavation  extending  to  the  harbor  of  Greytown,  of  which  nearly 
ten  miles  will  be  at  the  level  of  the  sea.  The  summit  level  of  the 
canal  extends  from  the  western  end  of  the  basin  of  Tola  to  the  eastern 
end  of  the  Deseado  basin,  a  distance  of  154  miles.  It  has  been  stated 
that  this  upper  level  is  no  feet  above  the  sea  level.  This  elevation  is 
proposed  to  be  overcome  by  six  locks,  three  on  the  Atlantic  and  three 
on  the  Pacific  slopes — the  lifts  of  these  locks  varying  from  a  maximum 
of  forty-five  feet  to  a  minimum  of  twenty-five  feet,  their  uniform 
length  being  650  feet  and  the  width  eighty  feet.  The  harbors  of 
Greytown  and  Brito  need  to  be  enlarged  and  improved  by  the  con- 
struction of  breakwaters  and  by  dredging,  but  the  works  required 
present  no  serious  engineering  difficulties.  With  the  exception 
of  the  rock  cuts  in  the  eastern  and  western  divides,  the  canal 
prism  will  be  at  all  points  wide  enough  for  two  ships  to  travel  in 
opposite  directions,  and  its  least  depth  will  be  thirty  feet.  In  the 
lake,  the  river  San  Juan  and  the  artificial  basins  vessels  can  travel  in 
entire  freedom." 

As  estimated  by  Mr.  Menocal  the  actual  cash  cost  of  the 
canal  will  be  $65,000,000  ;  English  engineers,  to  whom  the 
estimates  were  submitted  for  revision,  raised  the  maximum 
to  $87,000,000.  It  will,  of  course,  take  six  or  seven  years  to 
construct  the  canal,  and  the  interest  on  the  capital  will  bring 
the  real  cost  up  to  $100,000,000 ;  there  is  little  doubt  but 


THK  NICARAGUA  CANAI,.  141 

that  the  enterprise  could  be  carried  through  for  that  money 
were  the  credit  of  the  company  that  constructs  the  waterway 
as  good  as  that  of  the  United  States.  No  private  company 
has  such  good  credit,  and  if  the  Maritime  Canal  Company 
of  Nicaragua  carries  the  work  through  to  completion  its 
obligations  will  represent  much  more  than  $100,000,000. 
They  would  certainly  be  twice  that,  and  would  probably  be 
more.  The  capital  stock  of  the  Maritime  Canal  Company 
is  $100,000,000,  and  it  is  allowed  to  issue  bonds  to  the 
amount  of  $150,000,000.  The  Nicaragua  Canal  Construction 
Company  agreed  to  construct  the  canal  for  the  Maritime 
Company  and  to  accept  as  a  remuneration  the  $150,000,000 
of  the  Maritime  Company's  bonds  and  all  its  stock.  The 
available  residue  of  the  stock  is  $80,500,000;  for  of  the 
$100,000,000,  $6,000,000  went  to  Nicaragua  and  $1,500,000 
to  Costa  Rica,  and  $12,000,000  to  the  construction  com- 
pany, to  pay  for  the  concessions.  The  construction  com- 
pany will  doubtless  raise  the  funds  for  the  work  by  selling 
the  bonds  more  or  less  below  par,  throwing  in  the  stock  to 
the  purchasers  as  a  bonus. 

The  work  of  construction  has  been  in  progress  since  June, 
1889.  Up  to  January  i,  1893,  there  had  been  $6,885,230.33 
expended  on  the  enterprise,  of  which  sum,  $2,648,343.81 
were  paid  out  between  December  15,  1890,  and  January  i, 
1893.  The  work  thus  far  has  been  done  at  and  near 
Grey  town,  and  consists  of  the  construction  of  a  breakwater, 
the  dredging  of  the  harbor,  the  building  of  a  railroad  from 
Greytown  across  the  marshes  and  the  beginning  of  the  excava- 
tion of  the  channel  across  this  low-lying  plain  from  Greytown 
to  the  foot  hills, 

By  chartering  the  Maritime  Canal  Company  of  Nicaragua, 
in  1889,  Congress  gave  up,  for  the  present,  the  construction 
of  the  canal  directly  by  the  United  States  :  but  this  action 
failed  to  satisfy  many  of  those  who  appreciate  the  real 
political  and  economic  significance  of  the  waterway  to  the 
United  States.  By  a  resolution  of  the  Senate,  April  1 1 ,  1890, 


142  ANNALS  OF  THE  AMERICAN  ACADEMY. 

the  Committee  on  Foreign  Relations  was  "  directed  to  inquire 
into  what  steps  have  been  taken  under  the  act  of  Congress  en- 
titled '  An  Act  to  Incorporate  the  Maritime  Canal  Company 
of  Nicaragua'  approved  2oth  February,  1889,  and  what  are 
the  present  conditions  and  prospects  of  the  enterprise  ;  and 
to  consider  and  report  what,  in  its  opinion,  the  interests  of 
the  United  States  may  require  in  respect  of  that  interoceanic 
communication. ' '  The  committee  took  testimony  from  Mr. 
Miller,  Mr.  Menocal,  Mr.  Hotchkiss  and  Mr.  A.  T.  Mason, 
Attorney  of  the  Nicaragua  Canal  Construction  Company. 
This  testimony,  together  with  a  good  deal  of  other  informa- 
tion regarding  the  canal,  accompanied  the  report  made  by  the 
committee  January  10,  1891.*  The  bill  framed  by  the 
committee  for  the  purpose  of  limiting  the  obligations  of  the 
Maritime  Canal  Company  to  the  actual  cost  of  the  work  by 
granting  the  company  the  credit  of  the  United  States  was  not 
only  reported  too  late  for  action,  but  did  not  satisfy  the 
Senate.  A  second  resolution,  dated  January  7,  1892, 
directed  the  committee  to  inquire  what  progress  had  been 
made  with  the  work,  what  stocks  had  been  disposed  of, 
what  contracts  had  been  made  by  the  company,  and  to 
investigate  the  interests  of  the  United  States  in  the  proposed 
interoceanic  communication. 

The  testimony)*  taken  pursuant  to  this  second  resolution 
resulted,  at  the  last  session  of  Congress,  in  the  introduction 
into  the  Senate  of  a  bill  differing  from  the  former  one  in 
some  details.  Its  chief  provisions  were  :  The  United  States 
was  to  endorse  the  bonds  of  the  Maritime  Company  to  an 
amount  not  to  exceed  $100,000,000  ;  the  bonds  were  to  date 
from  January  i,  1893,  to  bear  interest  at  three  per  cent  per 
annum  from  date  of  issue,  to  be  redeemable  after  1913,  and 
to  mature  in  1953.  The  stock  of  the  Maritime  Company 
was  to  remain  at  $100,000,000,  of  which  $6,000,000  was 
reserved  to  Nicaragua  and  $1,500,000  to  Costa  Rica  for 

*  Senate  Report  1944,  Fifty-first  Congress,  second  session. 

f  Senate  Report  1262,  Fifty-second  Congress,  second  session,  Feb,  4,  1893. 


THE  NICARAGUA  CANAL.  143 

their  concessions,  and  $12,000,000  was  to  remain  in  the 
ownership  of  those  who  had  purchased  the  stock  from  the 
Maritime  Company  ;*  the  remainder  of  the  stock,  $80,500,000. 
was  to  pass  into  the  absolute  ownership  of  the  United  States 
without  liability  to  further  payment  or  assessment.  The 
bill  provided  for  a  sinking  fund  of  $1,000,000  per  annum, 
to  be  invested  in  the  bonds  of  the  Maritime  Company,  or  in 
good  securities  at  three  per  cent  interest.  It  was  assumed 
by  the  committee  that  the  tonnage  passing  through  the 
canal  would  average  9,000,00®  tons  a  year  during  the 
first  twenty  years  (it  would  probably  be  more)  ;  a  toll  of  a 
dollar  a  ton  would  therefore  yield  $9,000,000  a  year.  This 
would  pay  the  interest  on  $100,000,000  ($3,000,000),  pay 
the  cost  of  maintenance  and  operation  (about  $1,800,000), 
and  leave  $4,200,000  for  the  stockholders.  On  this  basis 
the  revenue  of  the  United  States  from  the  canal  would  pay 
off  the  entire  cost  of  the  waterway  in  less  than  twenty  years. 
The  bill  provided  that  the  expenditures  of  the  company  for 
works  of  construction  were  to  be  submitted  to  a  board  of 
United  States  engineers  for  criticism.  The  canal,  when 
constructed,  was  to  be  under  the  management  of  a  board  of 
fifteen  directors,  ten  of  whom  were  to  be  appointed  by  the 
President  of  the  United  States  and  confirmed  by  the  Senate. 
Of  the  other  five,  the  President,  voting  the  stock  of  the 
United  States,  by  his  proxy,  was  to  choose  two. 

The  bill  did  not  come  to  a  vote,  partly  because  it  was 
debated  so  late  in  the  session,  February  13  and  14,  but  also 
because  of  the  strong  feeling  that  the  United  States  ought  to 
construct  the  canal  herself,  the  same  as  is  done  in  the  case 
of  other  waterways.  The  action  that  the  government  is  to 
take  for  the  promotion  of  the  enterprise  is  still  an  unsettled 
question,  to  the  solution  of  which  the  Fifty- third  Congress 
ought  to  bend  its  best  effort. 

Whether  the  United  States  assumes  direct  and  entire  charge 
>cf  the  construction  of  the  canal,  or  brings  the  Maritime 

*  Vide  Supra  pp.  137-38. 


144          ANNALS  OF  THE:  AMERICAN  ACADEMY. 

Canal  Company  completely  under  control  and  allows  the 
company  to  proceed  with  the  work  strengthened  by  the 
credit  of  the  government,  is  a  question  of  secondary  import- 
ance. In  one  way  or  the  other  the  United  States  ought  to 
promote  the  enterprise.  The  government  can  carry  through 
the  work  far  more  economically  than  can  any  corporation 
of  individuals.  The  State  can  construct  the  canal  for  $100,- 
000,000  ;  no  corporation  can  do  it  for  less  than  $200,000,000. 
The  burden  of  extra  cost  must,  of  course,  fall  chiefly  on  our 
trade  and  industries.  Nbtice  what  the  difference  in  the 
fixed  charges  would  be  in  the  two  cases  :  Were  the  United 
States  to  construct  the  canal,  or  loan  its  credit  for  the  pur- 
pose, the  annual  fixed  charges  would  be,  interest  at  three 
percent  on  $100,000,000,  $3,000,000;  maintenance,  repairs 
and  operation  probably  less  than  (but  we  will  say)  $2,000,- 
ooo ;  for  a  sinking  fund  which  invested  at  three  per  cent 
would  amortize  the  principal  in  fifty  years,  $1,000,000,  total 
fixed  charges,  $6,000,000.  Now,  compare  this  with  the 
fixed  charges  that  a  corporation  would  have  to  bear  :  Inter- 
est at  six  per  cent  on  $200,000,000,  $12,000,000;  mainte- 
nance, repairs  and  operation,  $2,000,000;  total  fixed  charges, 
exclusive  of  amortization  of  capital,  $14,000,000.  The  fixed 
charges  have  to  be  met  by  tolls.  If  there  be  9,000,000  tons 
a  year  passing  the  canal,  a  toll  of  one  dollar  a  ton  would 
yield  $9,000,000.  This  sum  would  meet  the  fixed  charges 
in  case  the  Government  constructs  the  canal  or  loans  its 
credit  for  the  purpose,  and  leave  $3,000,000  for  distribution 
among  shareholders  ;  but  a  toll  of  a  dollar  a  ton  would  come 
$5,000,000  short  of  meeting  the  fixed  charges  that  a  cor- 
poration would  have  to  bear  ;  while  a  toll  of  $2.00  a  ton 
would  yield  only  a  two  per  cent  dividend.  A  toll  of  $2.50 
a  ton  would  yield  only  four  and  one-eighth  per  cent  divi- 
dend, and  a  toll  as  high  as  that  would  be  an  exclusive  one 
for  some  kinds  of  bulky  freight. 

The  government  could  make  the  toll  less  than  a  dollar  a 
ton  as  the  traffic  on   the  waterway  increased,  indeed  could 


THE  NICARAGUA  CANAI,.  14$ 

reduce  the  tolls,  after  the  capital  invested  had  been  amortized, 
so  that  they  would  simply  cover  fixed  charges.  More  that) 
this,  the  government  might  adjust  the  tolls  so  as  to  favor  our 
coast-wise  trade.  We  would  be  obliged  to  levy  the  same 
toll  on  our  ships  engaged  in  the  foreign  trade  as  we  laid  on 
vessels  of  other  countries  ;  but  the  coast- wise  traffic  might 
be  given  the  free  use  of  the  canal. 

Furthermore,  with  the  aid  of  the  State,  the  canal  can  be 
constructed,  and  its  benefits  realized  much  sooner.  Should 
the  United  States  be  apathetic  the  project  will  not  fail.  "  It 
will  be  worked  out ;  we  cannot  help  it.  This  generation  of 
men  may  hesitate  and  halt  and  falter  about  it,  but  there  will 
come  another  along  who  will  take  it  up  and  work  it  out."* 
American  enterprise  and  genius  will,  in  time,  overcome  the 
difficulties  and  obstacles,  though  the  enterprise  be  left  to 
individual  effort ;  however,  this  work  of  widest  national 
importance  ought  not  to  be  delayed  and  made  a  needlessly 
heavy  burden  on  commerce,  trade  and  industry,  but  should 
receive  the  prompt  and  efficient  support  of  the  State. 

NOTE. 

After  Chapter  XII.  had  been  given  final  form  by  the  printer, 
the  morning  papers  of  August  31,  1893,  £ave  notice  that,  on 
the  day  previous,  the  Nicaragua  Canal  Construction  Com- 
pany had  been  obliged  to  go  into  the  hands  of  a  receiver,  Mr. 
Thomas  B.  Atkins,  secretary  and  treasurer  of  the  Maritime 
Canal  Company.  The  Construction  Company,  it  appears, 
has  been  embarrassed  for  some  time,  and  not  very  much  work 
has  been  done  since  January  i,  1893.  There  are  several 
reasons  for  the  financial  embarrassment  of  the  company.  Of 
course  the  chief  one  is  the  crisis  that  has  so  thoroughly 
crippled  business.  As  Warner  Miller,  the  president  of  the 
Construction  Company,  says  :  "  During  all  the  present  finan- 
cial difficulties  it  has  been  trying  to  get  money  to  carry  tlie 
work  of  construction  along.  The  hard  times  have  rendered 

*  Speech  by  Senator  Morgan  in  th«  Senate,  February  13,  1893. 


146          ANNAI£  OF  THE  AMERICAN  ACADEMY. 

it  substantially  impossible  to  get  subscriptions  to  keep  things 
moving. ' '  The  financial  crisis  has  weakened  the  Construe? 
tion  Company  by  the  financial  losses  it  has  brought  upon 
certain  members  that  were  largely  interested  in  the  company. 
Furthermore,  the  Panama  scandal  has  tended  to  lessen  the 
confidence  of  capitalists  in  the  success  of  the  Nicaragua 
Canal.  The  recent  war  in  Nicaragua  has  retarded  the  work, 
and  has  probably  made  the  receivership  necessary  earlier  than 
it  -would  otherwise  have  been. 

Whether  the  construction  of  the  canal  will  be  interrupted 
very  long  or  not  is  impossible  to  foretell.  Mr.  Miller  says  : 
"It  ought  not  to.  The  Maritime  Company,  to  which  the 
concessions  were  made,  will  remain  intact.  It  is  unimpaired, 
and  ought  to  be  able,  after  times  improve,  to  revive  the  enter- 
prise and  go  ahead  with  it."  It  is  quite  probable  that  the 
re-organized  Construction  Company  or  some  other  private 
association  of  men  will  resume  the  work  of  construction  after 
a ;  short  time  ;  but,  without  venturing  to  prophesy,  I  feel 
confident  that  the  ultimate  assumption  of  the  enterprise  by 
the  United  States  will  come  sooner,  because  of  the  delays 
that  come  to  the  execution  of  the  work  by  private  corpora- 
tion. The  canal  is  of  too  vital  importance  to  be  very  long 
delayed. 


CHAPTER  XIII. 

THE  ECONOMIC  SIGNIFICANCE  TO  THE  UNITED   STATES   OF 
THE   EXTENSION  OF  'INLAND  WATERWAYS. 

The  improvement  and  extension  of  inland  waterways 
alter  industrial,  commercial  and  social  conditions.  The 
significance  of  cheap  transportation  has  been  but  briefly 
referred  to  in  the  previous  pages.  The  closing  chapter  of 
a  monograph  written,  as  this  is,  in  the  hope  of  showing 
how  waterways  conduce  to  cheapen  the  cost  of  carriage  and 
to  develop  industry,  ought,  from  the  nature  of  the  subject 
treated,  to  emphasize  strongly  the  economic  importance  of 
inland  navigation,  to  direct  attention  especially  to  the  indus- 
trial, commercial  and  social  interests  of  the  United  States 
and  to  show  how  they  may  be  modified  by  the  further  ex- 
tension of  water  routes. 

The  industry  that  lies  at  the  basis  of  all  others  is  agricul-  j 
ture,  and  its  dependence  on  the  conditions  of  transportation  ,; 
is  most  vital.     Indeed,  the  farmer  is  especially  at  the  mercy  / 
of  those  who  control  the  shipment  of  freight.     His  produce 
must,  in  large  part,  be  moved  during  a  few  months  of  the 
year,  a  fact  of  which  the  railroads  take  advantage  by  raising 
rates  when  produce  is  being  moved. 

The  agricultural  development  of  the  States  north  of  the 
Ohio  and  east  of  the  Mississippi  has  been  phenomenal. 
Bordering  on  an  inland  waterway  of  unparalleled  value, 
fourteen  hundred  miles  long  and  connected  with  the  sea- 
board by  a  navigable  river  and  a  canal,  that  have  furnished 
cheap  rates  for  a  part  of  the  freight  and  have  regulated  all 
charges  by  rail,  they  have  marketed  their  farm  produce  on 
the  seaboard  and  across  the  ocean.*  Kansas,  ^Nebraska  and 
the  Dakotas,  though  possessing  soil  superior  to  that  of  the 
Lake  States  for  the  growth  of  several  kinds  of  grain,  are  at 

*  Even  such  a  bulky  article  as  hay  is  shipped  to  Europe.  The  farmers  of  Wis- 
consin, even,  are  this  year  marketing  hay  in  France,  shipment  being  entirely  by 
water.  One  Fond  du  I,ac  hay  buyer  shipped  $65,000  worth  in  June,  1893. 

(147) 


148  ANNAI^S  OF  THE  AMERICAN  ACADEMY. 

a  great  disadvantage  as  compared  with  them,  because  of  the 
high  rates  of  transportation  by  rail.  It  is  not  because  the 
Dakotas  are  farther  from  New  York  and  Liverpool  than 
Minnesota,  Wisconsin  and  Illinois  are,  that  the  former  States 
are  so  much  at  a  disadvantage  ;  had  they  such  a  waterway 
as  the  Great  Lakes  available  for  use,  their  greater  distance 
from  the  seaboard  markets  and  from  the  mines  and  forests 
that  supply  them  with  fuel  and  lumber  would  be  of  small 
moment.  The  extension  of  the  commerce  of  the  Great 
Lakes  to  St.  Paul  and  Minneapolis  and  the  further  improve- 
ment of  the  Missouri  and  Mississippi  Rivers  and  their  better 
connection  with  the  lakes  will  give  the  agriculture  of  the 
west  Mississippi  States  a  great  impetus.  If  in  addition  to 
securing  better  means  of  transportation  these  States  can  find 
ample  coal  beds  within  their  borders,  they  will  rank  second 
to  none  of  the  States  in  their  industrial  prosperity. 

The  agricultural  interests  of  the  Mississippi  Valley  will  be 
largely  promoted  by  the  Nicaragua  Canal.  It  will  continue 
the  water  route,  beginning  with  the  Missouri,  Ohio  and 
the  upper  Mississippi,  to  the  harbors  of  San  Francisco, 
Portland,  Callao  and  Valparaiso,  where  the  prairies  of  the 
United  States  will  then  market  their  produce.  The  agri- 
cultural interests  of  the  Pacific  slope  will  be  greatly  for- 
warded by  the  Nicaragua  Canal.  Take  the  single  item  of 
wheat  and  flour,  of  which  1,800,000  tons  were  shipped  from 
the  Pacific  States  to  Europe  in  1891.  The  canal  would  have 
saved  $2.00  a  ton,  or  $3,600,000  in  freight  charges.  Under 
present  conditions  for  marketing  the  produce  of  the  Pacific 
States,  the  amount  grown  is  far  less  than  it  would  be  with 
the  Nicaragua  Canal  open  for  traffic.  The  wheat  crop  of 
Washington  last  year  is  estimated  at  20,000,000  bushels, 
but  the  capacity  of  the  cereal-growing  lands  of  the  State  is 
about  200,000,000  bushels  (6,000,000  tons).* 

The  benefits  of  inland  waterways  to  agriculture  manifest 
themselves  in  a  more  local  and  specific  way.  There  are 

*  Cf.    Speech  by  Senator  Squire,  Congressional  Record,  February  15,  1893,  p.  1676 


EXTENSION  OF  INLAND  WATERWAYS.  149 

many  articles  of  comparatively  small  value  for  which  trans- 
portation by  rail  is  possible  only  to  limited  quantities  and 
for  short  distances.  Cheap  transportation  by  water  increases 
the  marketable  quantities  of  such  subsidiary  farm  products 
as  fertilizers,  clay,  sand,  straw,  hay  and  wood.  The  by- 
products, as  is  the  case  with  manufacture,  are  often  the  real 
source  of  the  farmer's  profit ;  if  they  are  marketable,  much 
more  land  becomes  possible  of  cultivation,  population  in- 
creases and  the  value  of  land  rises. 

The  water  routes  of  the  United  States  have,  to  a  large 
degree,  made  possible  the  development  of  our  iron  industries. 
Some  of  the  richest  iron  regions  of  the  United  States,  those 
of  northern  Michigan  and  Wisconsin,  lie  nearly  a  thousand 
miles  from  the  great  coal  fields  of  Pennsylvania,  but  with  a 
waterway  connecting  them,  on  which  freight  rates  are  only 
a  little  over  a  mill  a  ton  mile,  the  two  mining  regions  are 
brought  close  together.  They  are  able,  because  of  this  fact, 
to  compete  with  the  newly-opened  mines  of  the  South  that 
lie  next  door  to  the  rich  coal  beds  of  Alabama. 

The  distribution  and  consumption  of  coal,  both  for  manu- 
facturing and  heating  purposes,  have  been  made  much 
greater  in  the  United  States  because  of  inland  transporta- 
tion ;  nor  have  we  by  any  means  yet  reached  the  limit  of 
the  possibilities  of  wider  distribution  or  lower  prices.  The 
distribution  of  Pennsylvania  coal  by  means  of  the  Ohio 
River  and  the  Great  Lakes  will  increase  in  the  future  with 
the  improvement  and  extension  of  the  water  routes  of  the 
Great  Lakes  and  the  Mississippi  River  system.  The  im- 
provement of  the  Missouri,  the  construction  of  a  river-ship 
canal  between  the  Mississippi  River  and  Lake  Michigan,  of 
lake-ship  canals  from  Pittsburgh  to  Lake  Erie  and  from 
Lake  Superior  to  St.  Paul  and  Minneapolis,  will  cheapen 
coal  throughout  the  North  and  West,  and  greatly  widen  the 
present  marketable  limits. 

By  the  improvements  of  the  Torabigbee  and  Warrior 
rivers,  now  in  process  of  execution,  the  coal  from  the  rich 


150          ANNAI<S  OF  THE  AMERICAN  ACADEMY. 

mines  of  upper  Alabama  is  going  to  secure  a  wide  market. 
!  I,abor  is  cheap,  and  the  coal  can  be  so  easily  mined  that, 
when  the  canalization  of  the  rivers  is  completed,  coal  can  be 
delivered  on  shipboard  at  Mobile  for  a  dollar  and  twenty-five 
cents  a  ton.  From  Mobile  it  can  be  carried  to  the  ports  of 
the  Gulf,  up  the  rivers  of  the  lower  Mississippi  Valley,  and, 
on  the  completion  of  the  Nicaragua  Canal,  to  our  Pacific 
States  and  to  the  western  shores  of  South  America.  In  the 
markets  of  the  western  slope  of  South  America  coal  now 
sells  from  nine  to  twelve  dollars  a  ton.* 

Inland  waterways  are  likewise  of  great  importance  to  the 
producers  and  consumers  of  lumber  in  the  United  States. 
Though  the  timber  is  widely  distributed,  there  are  neverthe- 
less vast  regions  into  which  all  lumber  has  to  be  imported  ; 
furthermore,  the  two  greatest  lumber  districts  of  the  United 
States,  Northern  Wisconsin  and  Michigan,  and  the  States  of 
Washington  and  Oregon  are  far  distant  from  the  prairies  of 
the  Mississippi  Valley  and  the  manufacturing  cities  of  the 
Eastern  States.  The  forests  of  Wisconsin  and  Michigan 
being  situated  between  the  headwaters  of  the  Great  Lakes 
and  the  Mississippi  are  able  to  distribute  their  lumber  cheaply 
by  means  of  these  great  waterways  to  widely  remote  markets. 
Not  so  the  forests  of  the  Pacific  slope,  whose  markets  are  at 
present  almost  exclusively  limited  to  the  region  west  of  the 
Rockies.  That  part  of  Washington  alone  which  lies  west 
of  the  Cascade  Range  contains  20,000,000  acres  of  timber, 
on  which  there  are  400,000,000,000  feet  of  salable  lumber,  but 
only  a  few  kinds  of  this  lumber  can  pay  the  costs  of  trans- 
portation East.  Masts  and  spars  are  now  shipped  around  the 
Horn,  and  of  late  some  Eastern  wagon  manufacturers  have 
had  special  grades  of  lumber  brought  by  the  same  long 
route.  Thus  far  the  railroads  have  been  able  to  transport 
east  from  Washington  only  high  grade  cedar  shingles. 
It  is  probable  that  kiln-dried  lumber  is  the  only  kind 
that  can  be  shipped  from  the  Pacific  States  by  rail  to 

•  Prom  speech  by  Senator  Frye,  in  the  Senate,  February  13, 1893. 


EXTENSION  OK  INI^AND  WATERWAYS.  15  i 

the  Mississippi  Valley.*  The  Nicaragua  Canal  will  bringf 
this  vast  wealth  of  lumber  in  the  Western  States  10,000* 
miles  nearer  market,  greatly  increase  its  sale  and  add  largely 
to  the  value  of  the  standing  timber.  / 

Inland  waterways  enable  home  industries  to  compete  more* 
easily  with  foreign  producers,  not  only  by  decreasing  the 
costs  of  transporting  articles  destined  for  exportation,  but 
also  by  making  raw  materials  cheaper.  The  ways  in  which* 
the  waterways  do  and  might  lower  the  costs  of  the  products' 
of  the  farms,  mines  and  forests  of  the  United  States  have 
been  noted.  A  country  such  as  the  United  States,  in  which* 
a  high  standard  of  life  among  laborers  fixes  the  necessary* 
rate  of  wages  high  and  in  which  capital  demands  a  high  rate* 
of  interest,  can  compete  with  a  country,  where  the  standard 
of  life  and  wages  are  lower,  only  by  virtue  of  the  superior 
productive  power  of  labor  and  by  having  cheaper  raw 
materials.  Now,  whatever  lessens  the  cost  of  raw  materials 
allows  the  price  of  finished  goods  to  fall  by  a  like  amount 
without  trenching  on  the  amount  received  by  wages  and* 
interest,  wages  being  here  used  to  include  remuneration  for 
intelligence.  The  development  of  the  inland  navigation  of* 
the  United  States  will  assist  us  in  maintaining  the  higher* 
standard  of  life  in  competition  with  Europe. 

Suppose  again,  that  the  waterways  lower  the  cost  of  raw 
materials  entering  into  consumption  goods  produced  in 
industries  where  competition  does  not  exist  or  is  present  in 
only  a  slight  degree.  Competition  does  not  then  compel  the 
lowering  of  price  and  the  lower  cost  for  raw  materials  leaves 
a  larger  portion  of  the  value  of  the  finished  products  for* 
wages  and  interest,  f  The  wage-earners  have  a  direct  interest' 

*  Cf,  Speech  by  Senator  Squire  in  the  Senate,  February  14,  1893. 

t  Patten,  "The  Premises  of  Political  Economy,"  p.  107:  "If  five  bushels  off 
wheat  and  ten  pounds  of  cotton  are  consumed  in  the  production  of  one  hundred 
yards  of  cloth,  wages  and  interest  will  depend  on  the  value  of  wheat  and  cotton. ' 
While  twenty  yards  of  cloth  will  exchange  for  the  above  amount  of  wheat  and  cot- 
ton, eighty  yards  will  remain  to  be  distributed  as  wages  and  interest,  but  as  the 
value  of  wheat  and  cotton  increases  so  that  thirty,  then  forty  or  more,  of  the  hun- 
dred yards  of  cloth  must  be  given  in  exchange  for  them,  the  return  for  labor  an<3 
capital  is  reduced  by  a  like  amount.    It  is  then  the  margin  between  the  value  of  » 
what  is  consumed  in  production  and  what  is  produced,  on  which  wages  and  interest 
depend,  and  they  increase  as  the  margin  is  enlarged." 


c'52          ANNAI^  OF  THE  AMERICAN  ACADEMY. 

in  the  cheapening  of  transportation  of  raw  materials  by 
means  of  inland  waterways.  The  cheapening  of  raw 
materials  increases  the  net,  or  surplus,  value  of  the  finished 
product  above  the  costs  of  production ;  to  whom  this 
larger  surplus  value  will  go — i.  e.,  whether  to  the  wage- 
earners  or  the  capitalists,  and  in  what  proportion — depends 
on  the  relative  strength  of  these  two  agents  of  production.* 
If  the  laborers  have  a  firm  standard  of  life  and  the  desire  to 
raise  it,  they  will  secure  a  large  part  of  the  savings  due  to 
cheaper  raw  materials.  Inland  waterways,  by  reducing 
the  cost  of  production,  so  affect  industry  as  to  put  laborers 
under  objective  economic  conditions  that  make  it  easier  for 
them  to  raise  their  standard  of  living. 

Intimately  connected  with  the  influence  of  inland  water- 
ways on  industrial  development  are  their  effects  on  domestic 
and  foreign  commerce.  A  large  part  of  this  monograph  has 
,  been  devoted  to  the  consideration  of  the  function  of  inland 
'  waterways  as  promoters  of  domestic  commerce,  and  little 
further  need  be  said  on  that  theme.  The  numerous  works 
for  the  improvement  and  extension  of  inland  waterways  that 
have  been,  or  now  are,  the  objects  of  appropriation,  might 
be  considered  and  note  made  of  the  commerce  that  has  been, 
and  is  being,  developed  as  the  result  of  the  liberality  of 
Congress ;  but  this  would  needlessly  multiply  illustrations 
of  the  same  general  character  as  those  have  which  have 
already  been  given. f 

Mention  has  been  made  of  several  unfinished  works  and 
of  others  whose  execution  is  proposed,  the  effect  of  which 
must  surely  be  a  large  increase  of  our  inland  navigation. 
Past  improvements  of  the  Mississippi,  the  Ohio,  the  Hud- 
son, the  Great  Lakes  and  other  important  waterways  have 
been  the  sesame  of  valuable  commerce,  but  what  has  as  yet 
been  revealed  is  only  the  forecast  of  future  possibilities. 

*  "The  Stability  of  Prices,"  by  S.  N.  Patten. 

•  f  In  the  reports  of  the  chief  of  engineers  each  object  of  appropriation  is  di»- 
cussed  at  length.  The  report  of  the  Senate  Committee  on  Commerce,  May  13, 
*893.  giTCS  this  information  in  briefer  form. 


EXTENSION  OF  INLAND  WATERWAYS.  153 

A  great  increase  in  the  domestic  commerce  of  the  United 
States  awaits  the  construction  of  the  Nicaragua  Canal.  Only 
when  the  waterway  shall  have  broken  through  the  barrier 
which  the  Rocky  Mountains  oppose  to  the  communication 
of  the  Eastern  with  the  Western  commonwealths  will  our 
country  become  in  a  commercial  sense  the  United  States. 

The  Nicaragua  Canal  will  give  a  powerful  impetus  to  the 
trade  of  the  United  States  with  foreign  countries.  The 
great  influence  of  the  Suez  Canal  on  the  commerce  of  the 
nations  of  Europe,  especially  England,  is  well  known. 
According  to  the  report  of  the  Suez  Canal  Company,  pub- 
lished June  2,  1892,  4207  ships  passed  the  canal  the  previous 
year,  seventy-six  per  cent  of  the  vessels  sailing  under  the 
English  flag.  Of  the  total  tonnage,  8,698,770  tons,  Eng- 
land's share  was  seventy-eight  per  cent.  England's  com- 
merce with  the  East  has  risen  from  $537,000,000  in  1870,  at 
the  opening  of  the  canal,  to  $752,000,000  in  1887,  a  gam  °f 
over  forty  per  cent  in  seventeen  years.  The  increase  of  Eng- 
land's total  commerce  with  the  world  during  this  time  was 
only  seventeen  per  cent.f 

The  United  States  will  receive  greater  benefit  from  the 
Nicaragua  Canal  than  England  has  gained  from  the  water- 
way across  the  isthmus  of  Suez.  The  water  route  through 
Nicaragua  will  give  the  Pacific  States  European  markets  and 
the  Eastern  cities  of  the  United  States  trade  with  nations 
bordering  on  the  Pacific,  while  the  Gulf  States  will  derive 
especial  benefit.  As  the  Atlantic  States  face  the  east  and 
look  across  the  ocean  to  Europe,  so  the  Gulf  States  face  the 
south  and  look  with  longing  eyes  across  the  isthmus  to  the 
markets  of  the  Western  States,  of  South  America  and  of 
Japan. 

The  Suez  Canal  has  been  a  positive  detriment  to  our 
foreign  commerce,  in  that  it  has  given  England  the  incon- 
testable supremacy  in  the  trade  with  China,  Japan  and 
Australia.  Before  the  construction  of  the  canal  we  were  as 

f  See  Warner  Miller,  Engineering  Magazine,  March,  1893. 


154 


ANNALS  OF  THE  AMERICAN  ACADEMY. 


near  these  ports  as  England  ;  now  we  are  2700  miles  farther 
distant.  Let  the  Nicaragua  Canal  be  opened  and  this  will  be 
reversed.  Tne  United  States  will  then  be  as  near  Hong  Kong 
as  Liverpool,  while  we  shall  be  1200  miles  nearer  than  Liver- 
pool to  the  northern  ports  of  China.  We  shall  be  2700  miles 
nearer  the  western  ports  of  South  America,  1900  miles  nearer 
to  Japan  and  1000  miles  nearer  Australia.* 

The  commerce  with  the  countries  of  the  Pafcific  is  well 
worth  our  effort  to  obtain.  These  countries — China,  Japan, 
Australia,  Tasmania,  New  Zealand,  Hawaii,  Ecuador,  Boli- 
via, Peru,  Chile,  etc. — have  a  total  commerce  equal  to 
$1,215,004,956,  of  which  the  imports  are  valued  at 
$642,361,745  and  the  exports  at  $572,543,211.  In  the 
distribution  of  this  trade,  England  and  the  United  States 
share  as  follows :  Great  Britain  sells  goods  to  the  value  of 
$467,016,507  and  buys  to  the  amount  of  $346,550,882. 
Thus  the  balance  in  England's  favor  is  $120,465,625.  The 
value  of  the  goods  sold  by  the  United  States  is  $41,511,362, 
of  those  bought,  $64,003,920,  leaving  a  balance  against  us 
of  $2 2, 492, 558. f  We  can  get  most  of  this  trade  when  the 
Nicaragua  Canal  is  put  through.  Last  year  China  imported 
cotton  and  cotton  goods  to  the  value  of  $61,504,348,  and  the 
United  States  furnished  only  $5,360,508  of  this ;  England 
supplied  most  of  the  rest  by  means  of  cotton  purchased  from 
us.  The  first  shipment  of  cotton  from  the  United  States  to 

*  The  following  table  shows  the  number  of  miles  that  the  Nicaragua  Canal  will 
shorten  the  distances  between  several  important  ports : 


to—          Miles, 
ncisco           9,894 
>ng     .          4,163 
na  .  .          6,827 

New  Orleans  to  —     Miles 
San  Francisco    .  .  11,005 
Guayaquil    ....    9,343 
Callao     7»9T3 

I4verpool  to—  Miles. 
New  Zealand  .  .  .  1,051 
Hong  Kong  ....  1,265 
Yokohama  ....  3,929 

ne      .          3,290 
iland  .          3,870 

Valparaiso   ....    5,975 
Liverpool  to  — 

Guayaquil  ....  5,431 
Callao  .  4,090 

h  Islands,   7  842 
6.981 

San  Francisco    .   .    6,996 
Melbourne   ....      392 

Valparaiso  .  .  .  .  2,114 
Sandwich  Islands,  4,944 

so   ....    5,062 

Melbourne 

New  Zealai 

Sandwich  I 

Callao     .   . 

Valparaiso 

Taken  from  the  Senate  Report,  1142,  Fifty-second  Congress,  second  session.  It 
will  be  noted  that  the  saving  in  distance  is  without  exception  in  favor  of  the  United 
States. 

f  See  Congressional  Record^  February  14,  1893.    Speech  by  Senator  Frye. 


EXTENSION  OF  INLAND  WATERWAYS.  155 

Japan  was  in  1888,  when  85,000  pounds  were  sent.  In  1891 
7,000,000  pounds  were  sent  to  supply  380,000  spindles. 
The  industrial  development  of  the  Orient  must  surely  follow 
the  introduction  of  better  means  of  inland  communica- 
tion. This  industrial  revolution  has  as  yet  but  begun. 
If  we  are  in  possession  of  a  water  route  across  Nicaragua 
we  shall  greatly  benefit  by  the  growth  that  the  foreign  trade 
of  the  Pacific  States  is  to  experience  in  the  future.  The 
Orient  and  the  Occident  are  now  separated  from  each  other 
by  the  mountain  wall  that  skirts  the  coast  of  America  from 
Alaska  to  the  Strait  of  Magellan.  At  Nicaragua  this  wall 
is  only  a  few  feet  high.  Twenty-six  miles  of  excavation 
at  this  point  will  make  a  waterway  from  ocean  to  ocean. 
When  once  this  way  is  constructed  the  East  and  the  West 
will  be  united  by  the  close  bonds  of  commercial  amity, 
we  shall  send  iron  and  steel  to  the  nations  beyond  the 
Pacific,  we  shall  sell  them  locomotives,  engines  and  other 
machinery  with  which  to  build  their  railroads  and  telegraphs 
and  to  establish  and  develop  their  manufacturing  industries. 
The  Nicaragua  Canal  will  be  the  highway  through  which 
the  civilization  of  America  will  pass  to  the  peaceful  conquest 
of  the  East. 

Reference  has  been  made  in  the  introductory  chapter  and 
in  this  to  the  fact  that  the  extension  of  inland  waterways  is 
of  social,  as  well  as  industrial,  significance.  Economic  forces 
combine  with  moral  ones  in  social  reform.  Rapid  transporta- 
tion and  cheap  freight  rates  condition  to  a  large  degree  all 
industrial  activity.  It  is  with  cheap  transportation  only 
that  this  monograph  has  concerned  itself ;  but  to  the  extent 
that  waterways  have  been  shown  to  cheapen  rates  to  that 
extent  have  they  been  shown  to  be  an  economic  force  that 
makes  for  social  reform. 

Inland  waterways  operate  indirectly  to  promote  social 
reform.  The  regeneration  of  the  dependent  classes  will  be 
brought  about  directly  by  the  influences  that  work  to  change 
the  subjective  nature  of  the  men  in  the  lower  strata  of  society. 


156          ANNALS  OF  THE  AMERICAN  ACADEMY. 

Of  course,  the  fundamental  forces  by  which  this  can  be 
accomplished  must  be  subjective  and  psychic,  but  these  can 
be  efficient  in  a  large  degree  only  when  the  objective  condi- 
tions are  made  as  favorable  as  possible.  Society,  the  State 
and  capital  in  its  organized  forms  have  an  important  duty  to 
perform  in  setting  in  order  the  theatre  in  which  the  moral, 
the  psychic  forces  must  act. 

If  the  thesis  of  this  monograph  has  been  established,  the 
extension  of  inland  waterways  has  an  important  beaming  on 
the  social  asjge.11  as  thft  industrial  problems  of  thejlay,  and 
it  is  an  incomplete  view  of  the  present  functions  of 
inland  navigation  that  reveals  only  their  commercial  and 
industrial  aspects.  To  the  extent. 


transportation  to  promote  social  reform  is  realized  will  the 
striking  words  of  the  Cullom  Committee  acquire  j>ignifi- 
cance  :  * '  The  manifest  destiny  of  our  country,,  points  ujjerr- 
inglY^to^  this  emancipation  of  the  waters  as  its  next_great 
work,  a  fitting  sequel  to  the  emancipation  of  the  slave,  a 
destiny  not  of  war,  but  of  beneficence  an^peace7to  which 
the  heart  of  the  nation  turns  as  spontaneously  and  resistlessly 
as  the  waters  of  its  great  river  flow  to  the  Gulf. ' '  The  fig- 
ure of  speech  is  a  strong  one,  it  is  true,  but  it  serves  well 
emphasize  an  important  truth  by  expressing  the  hope 
the  present  in  a  prophecy  for  the  future. 


»j 

[<r-  N 

to 
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Interstate  Commerce  Commission,  Second  Annual  Report  of.  Wash- 
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JACKSON,  ANDREW — Messages  to  Congress.     Inaugural  Address. 

JAMES,  E.  J. — The  Agitation  for  Federal  Regulation  of  Railways. 
Publications  of  the  American  Economic  Association,  Vol.  II, 
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The  Canal  and  the  Railway  ;  Publications  of  the  American  Eco- 
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JOHNSON,  EMORY  R. — River  and  Harbor  Bills.  ANNAI^S  OF  THE 
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INDEX. 


Ac  worth,  W.  M.,  crowded  condition  of 
passenger  traffic  in  London,  67 

Adams,  H.  M.,  16 

Annals  of  the  American  Academy,  10, 
67,  112 

Arthur,  Chester  A.,  Veto  of  river  and 
harbor  bill  of  1882,  118 

Atkins,  Thomas  B.,  146 

Balize,  English  settlement  at,  135-136; 
England's  treaty  with  Guatemala  in 
1859,  136 

Bellingrath,  Ewald,  cost  of  moving 
freight  by  canal,  79 ;  quoted  concern- 
ing use  of  hydraulic  lifts  in  Germany, 
86;  on  power  of  canals  to  compete 
with  railroads,  88-89 

Bibliography  of  works  consulted,  157- 
160 

Bompiani,  104 

Brentano,  Lujo,  on  construction  of 
waterways  by  the  State  and  by  corpo- 
rations, 96-97 

Canals,  maritime  and  lake  ship-canals 
characterized,  14-15;  should  be  studied 
independently  of  river  improvements, 
16 ;  length  of  canals  of  United  States, 
32;  causes  of  the  abandonment  of 
many  canals  of  New  England,  Penn- 
sylvania, New  York  and  Ohio,  33-36 ; 
traffic  on  canals :  in  New  England,  31, 
in  France,  42,  in  Germany,  44 ;  con- 
ditions under  which  canals  can  com- 
pete with  railroads,  73-89;  classifica- 
tion of,  73 ;  considerations  regarding 
the  costs  of  construction,  74-76 ;  the 
cost  of  maintenance,  76-78 ;  of  moving 
freight  on,  74-76 ;  use  of  steam  on,  80-81. 
protection  of  banks,  81 ;  traction  of 
canal  boats,  81-83 ;  large  canals  more 
economical,  83-84;  Haupt's  law,  84; 
locks  on,  84-87;  hydraulic  lifts  and 
inclined  planes,  85-87 ;  Bellingrath  on 
power  of  canals  to  compete  with  rail- 
roads, 88-89;  use  of  for  draining  and 
irrigating,  88;  requisite  dimensions, 
89  ;  tolls  on  European  waterways,  90 ; 
cost  of  transportation  on  English 
waterways,  94 ;  Illinois  and  Michigan 
Canal,  124-125  ;  Hennepin  Canal,  124  ; 
Chicago  Drainage  Canal,  125 ;  proposed 
canal  from  Pittsburg  to  Lake  Erie,  130, 
from  St.  Paul  to  Lake  Superior,  130 ; 
canal  from  Great  Lakes  to  the  ocean, 
131  ;  should  be  within  the  United 
States.  131, 132 ;  proposed  canals  be- 
tween Cincinnati  and  Lake  Erie,  and 
between  Philadelphia  and  New  York, 
132 ;  Nicaragua  Canal,  133-146 

Chesapeake  and  Delaware  Canal,  129 

Chicago  Drainage  Canal,  125 


/  Chipman,  J.  L.,  suggested  Detroit  water- 
ways convention  100 

Citizens'  Municipal  Association  of  Phil- 
adelphia, report  of  1893,  quotation 
concerning  the  electric  light  monopoly 
of  Philadelphia,  50 

Clayton-Bulwer  Treaty,  135-137 

Clements,  Edwin,  26-30 

Cohn,  Gustay,  22 

Columbia  River,  size  and  resources  of 
region  drained,  128 ;  obstructions  to 
navigation,  improvements,  128, 129 

Combination  and  consolidation  of  rail- 
roads,— See  "Railroads." 

Commerce,  coastwise  and  inland  of 
United  States,  38 ;  on  French  water- 
ways, 42,  43;  on  German  waterways, 

44,  45 ;  relation  between  traffic  by  rail 
and  by  water,  France,  42, 43,  Germany, 

45,  46,  the  United  States,  46, 47 
Commissions,  State  railway,  48 
Cullom,  Shelby  M.,  opposed  to  pooling 

contracts,  54;   Cullom  committee  of 
1885,  57,  58,  156 

Cumberland  River,  improvements  on, 
126 

Delaunay-Belleville,  70 

Detroit,  Waterways  Convention  at,  100 

Dufourny,  55,  103 

Economic  significance  of  the  extension 
of  waterways  of  the  United  States, 
147-156 :  I.  As  regards  agriculture,  147- 
149;  II.  Iron  industries,  149-150;  III. 
Lumber  business,  150, 151 ;  IV.  Foreign 
competition,  151, 152,  V.  Domestic  and 
foreign  commerce,  152-155;  VI.  The 
promotion  of  social  reform,  6, 151-152, 
155-156. 

Edmunds,  George  F.,  135 

Ely,  George  H.,  on  a  canal  from  Great 
Lakes  to  the  sea,  101 

England,  Waterways  of,  reasons  why 
they  were  crippled  by  the  railroads, 
23,  24 ;  legislation  of  Parliament  con- 
cerning, 24-32;  methods  employed  in 
improving,  115 

Erie  Canal,  completion  of,  32 ;  improve- 
ments needed,  35,  36;  character  of 
freight  on,  40  ;  tonnage  on,  46 ;  grain 
rates  on,  55-57 ;  rate  per  ton  mile,  78 ; 
boats  used  on,  78;  steam  traction  on. 
81 ;  electric  traction  on,  83  ;  locks  on, 
85 

Evansville,  Waterways  convention  at, 
101 

Evarts,  William  M.,  135 

Finet,  Theophile,  quoted  concerning  rail 
and  water  traffic,  39 

Fink,  Albert,  on  waterways  as  regulators, 
of  tariffs,  59-60 


(161) 


162 


ANNALS  OF  THE  AMERICAN  ACADEMY. 


Fleury,  43 

France,  Waterways  of,  length  41-42 ;  law 
of  1879,  41 ;  classification  and  tonnage 
of  freight  on,  42 ;  compared  with  rail- 
roads, 42-43  ;  subventions  by  the  de- 
partments, 107-108 ; 'navigation  cham- 
bers, 108 ;  methods  by  which  improve- 
ments are  made,  115-116 

Frye,  William  P.,  on  opposition  to  Con- 
gressional aid  to  inland  navigation, 
10-11;  speech  in  Senate  on  Nicaragua 
Canal,  134 

Germany,  Waterways  of,  traffic  on  rivers, 
44;  on  canals,  44-45;  statistics  of  ton- 
nage on,  45 ;  relation  to  railroads,  45-46 ; 
tolls  on,  90 ;  State  improvement  an  ac- 
cepted fact,  96 ;  the  way  improvements 
are  made,  115-116 

Gladstone,  William  E.,  quoted  concern- 
ing power  of  railroads  in  Parliament, 
25 ;  quotation  from  speech  of  1844  on 
inefficiency  of  railway  competition,  50 

Granger  legislation,  48 

Hadley,  Arthur  T.,  22 

Haunaii,  Edward,  quoted  on  New  York 
canals,  36;  rates  on  canals  and  rail- 
roads of  New  York,  56-57  ;  economy  of 
steam  traction  on  Erie  Canal,  81 

Haupt,  Lewis  M.,  relative  cost  of  large 
and  small  canals,  75;  this  stated  as 
a  law,  84 

Hepburn  committee,  quoted  concerning 
relation  of  the  canal  to  the  railroad,  59 

Hennepin  Canal,  124 

Hoerschelman,  81 

Hotchkiss,  Hiram,  138,  142 

Hudson  River,  traffic  on,  8  ;  its  improve- 
ment the  charge  of  the  United  States, 
111 ;  conditions  of  navigation,  improve- 
ments, 127 

Hydraulic  lifts,  described,  85  ;  Anderton 
lift,  86  ;  at  FontinStteand  LouviSre,  86  ; 
suggested  for  use  in  Germany  and  at 
the  Dalles  of  the  Columbia  River,  Ore- 
gon, 86, 129 

Illinois  and  Michigan  Canal,  124 

Improvement  of  waterways,  arguments 
for  private  enterprise,  91-93 ;  for  State 
construction,  93-98;  Brentano  on,  96- 
97 ;  chief  works  should  be  by  the  State, 
98 ;  facts  concerning  the  United  States 
and  the  States,  110-111 

Inclined  planes,  described,  85 ;  use  on 
Shropshire  Canal,  86  ;  use  in  Germany 
and  on  Morris  and  Essex  Canal,  86; 
their  superioritv  over  locks  and  lifts, 
86-87 

Inland  navigation,  opposition  to  con- 
gressional aid,  9,  11 ;  reasons  for  pre- 
sent promotion  by  the  State,  11-12 ;  re- 
naissance of,  12-13 ;  international  con- 
gresses on,  38,  72,  99-100 

Internal  improvements  in  the  United 
States,  110, 121 ;  causes  of  the  abandon- 
ment of  them  by  Congress  from  1830- 
1870,  112 ;  the  River  and  Harbor  Bill, 
110-121 


International  congresses  on  inland  navi- 
gation, committee  on  statistics,  ap- 
pointed by  Third  Congress,  38 ;  resolu- 
tion of  the  Fourth  Congress  concerning 
relation  of  waterways  and  railroads, 
72 ;  the  proceedings  of  the  Fourth  and 
Fifth,  99-100 

Interstate  Commerce,  assumption  of  its 
control  by  Congress,  11;  the  National 
Commission:  its  report  referred  to,  22  ; 
the  establishment  of  the  commission, 
48;  it  favored  pooling,  53;  investigation 
in  1885  of  Senate  Committee  on  Inter- 
state Commerce,  57-61;  the  Commis- 
sion's freight  classification,  59,  60 

Jeans,  J.  Stephen  quoted  on  the  use  of 
canals,  36 ;  on  locks  designed  for  Nic- 
aragua Canal,  87;  on  condition  of 
English  canals,  93,  94 

Kentucky  River,  length,  traffic,  improve- 
ment of  navigation,  125,  126 

Lakes,  The  Great,  vessels  and  traffic  on, 
8 ;  the  commerce  compared  with  the 
foreign  commerce  of  the  United  States, 
9;  tonnage  on,  38,47;  freight  rates 
compared  with  charges  by  rail,  56 ;  the 
growth  of  lake  commerce  has  aided  the 
railroads,  68 ;  average  freight  rate  on, 
77 ;  costs  of  transportation  on,  77 ; 
their  improvement  not  a  work  adapted 
to  private  enterprise,  94,  95 ;  work  of 
Detroit  convention  to  secure  twenty- 
foot  channels,  100,  101;  convention  to 
discuss  a  ship-canal  to  the  ocean,  101 : 
no  tolls  on  the  Lakes,  106 ;  the  twenty- 
foot  channels  in,  123 ;  a  ship-canal  to 
the  ocean,  131 ;  influence  of  the  Great 
Lakes  on  the  agricultural  development 
of  neighboring  States,  147, 148 

Locks,  invention  of,  84 ;  impediment  to 
navigation,  85 ;  attempts  to  substitute 
lifts  and  planes,  86,  87 ;  locks  on  Erie 
Canal,  85;  on  Nicaragua  Canal,  87, 
140 ;  on  the  Hennepin  Canal,  124 

Load,  relation  of  net  to  dead  on  boats 
and  cars,  77 ;  of  an  average  train,  78 , 
of  a  boat,  78 

Manchester  Canal,  cost  underestimated, 
15 ;  cost  per  mile,  75 ;  its  service  to 
commerce,  75 

Maritime  Canal  Company  of  Nicaragua, 
135,  138,  139,  141 

Mason,  A.  T.,  142 

Mayo-Smith,  R.,  56 

Meitzen,  August,  79 ;  quoted  on  taxing 
the  increment  in  property  resulting 
from  the  construction  of  a  waterway, 
107 

Menocal,  A.  G.,  description  of  Nicaragua 
Canal,  139, 140 ;  testifies  before  Senate 
Committee,  142 

Merchants'  Exchange  of  Buffalo,  petition 
to  keep  the  Erie  Canal  open,  37 

Michaelis,  estimate  of  costs  of  construct- 
ing canals  in  Prussia,  75 

Miller,  Warner,  137,  138,  142;  quoted  145, 
146,  153 


INDEX. 


163 


Mississippi  River,  boats  and  traffic  on, 
8;  tonnage  on.  47;  its  influence  on 
charges  by  rail,  57 ;  its  improvement 
should  have  more  reference  to  control 
of  floods,  94 ;  its  improvement  is  rightly 
a  State  enterprise,  94,  95 ;  it  is  prop- 
erly a  free  way,  106 ;  the  Mississippi 
River  Commission,  122 ;  the  present 
work  of  improvement,  122, 123 

Minnesota  Canal  Company,  13,  130 

Missouri  River,  the  Missouri  River  Com- 
mission, 123 ;  improvements,  123 

Morgan,  John  T.,  134,  146 

Morrison,  quotation  from  speech  in  Par- 
liament, May  17,  1836,  22;  resolution 
introduced  in  Parliament,  1836,  25; 
quoted  on  railway  consolidation,  50 

Navigation  Chambers,  proposal  to  estab- 
lish them  in  France,  108 

New  York  Central  and  Hudson  River 
Railroad,  tonnage  on,  8 ;  earnings  per 
ton  mile,  56 ;  twenty-hour  trains  from 
New  York  to  Chicago,  67,  68 ;  expense 
of  moving  freight  on,  78 

Nicaragua  Canal,  interest  in  it  awakened 
by  the  trouble  between  the  United 
States  and  Chile,  11  ;  conventions  in 
the  interest  of,  102 ;  general  discussion 
of,  133-146;  three- fold  functions  of,  133; 
it  should  be  controlled  by  the  United 
States,  133,  134,  137,  139,  141,  143,  145; 
Pres.  Hayes  quoted  on  this  point,  134 ; 
the  Clayton-Bulwer  Treaty,  135-137; 
treaty  of  1867,  136;  proposed  treaty  oi" 
1884,  136 ;  the  Nicaragua  Canal  Asso- 
ciation organized,  137 ;  organization  of 
the  Nicaragua  Canal  Construction 
Company,  137 ;  concessions  of  Nicara- 
gua and  Costa  Rica,  138 ;  the  formation 
of  the  Maritime  Canal  Company,  138 ; 
beginning  of  work  on  Canal,  139 ;  route 
of  canal  described  by  Menocal,  139-140 ; 
estimated  cost,  140,  141 ;  work  done  up 
to  January,  1893,  141 ;  Senate  investi- 
gation in  1890,  and  bill  of  1891,  141,  142 ; 
investigation  of  1892, 142 ;  bill  of  1893, 
142, 143 ;  economy  of  government  sup- 
port of  the  enterprise,  144,  145;  the 
influence  of  the  canal  on  the  agricul- 
tural interests  of  the  Mississippi  Valley 
and  Pacific  slope,  148 ;  the  impetus  its 
construction  will  give  trade  and  com- 
merce of  the  United  States,  153-155 

Nicaragua  Canal  Association,  137,  138 

Nicaragua  Canal  Construction  Company 
137, 138, 139, 141 ;  passes  into  receiver's 
hands,  145, 146 ;  probable  effect  of  this, 
146 

Nord-Ost-See  Canal,  in  process  of  con- 
struction by  Prussia  and  the  German 
Empire,  45 ;  military  purpose  of,  11 

Ohio  River,  tonnage,  46,  47 ;  the  improve- 
ment of  navigation  on,  125 ;  the  coal 
trade  on,  149 

Panama  Canal,  cause  of  failure,  15 
Parliament,  The  English,  legislation  to 
maintain  waterways  independent  of 
railroads,  24-32  ;   futility  of  such  legis- 
lation, 24 ;  report  of  select  committee 


of  1839, 25 ;  power  of  railway  companies 
over,  25;  resolution  by  Morrison  in 
1836,  25 ;  bill  of  1844,  25  ;  canal  owners 
allowed  to  become  shippers,  26  ^rail- 
way commission  from  1847  to  1851726"; 
select  committee  of  1852, 26 ;  bill  of  1854, 
26.  27;  investigation  of  1872,  27,  28; 
bill  of  1873,  28 ;  the  Railway  and  Canal 
Traffic  Act  of  1888,  29-31 ;  revision  of 
schedule  of  rates  on  railways  and 
waterways,  31 ;  operation  of  law  of 
1888,  31,  32 

Patten,  S.  N.,  quoted,  151,  152 

Peabody,  James,  favors  pooling,  53 

Pennsylvania,  Constitution  of,  Art.  XVII, 
regarding  combination  of  waterways 
with  railroads :  quoted,  51 ;  article  not 
enforced,  52 

Pennsylvania  Railroad,  tonnage,  8;  earn- 
ings per  ton  mile,  expense  of  conduct- 
ing transportation,  77,  78 

Peslin,  81 

Poe,  O.  M.,  on  deepening  channels  of  the 
Great  Lakes,  123 

Pooling  contracts,  favored  by  Interstate 
Commerce  Commission,  53 ;  James  Pea- 
body  on,  53 ;  opposed  by  Senate  Com- 
mittee, Fifty-second  Congress,  54 ;  Sen- 
ate Committee  of  Fifty-third  Congress 
to  investigate,  54 

Railroads,  their  freight  compared  with 
that  of  waterways,  37-47  ;  influence  of 
waterways  on  tariffs  of,  48-62 ;  differ  in 
character  from  waterway,  49 ;  com- 
bination the  natural  law  of  their  man- 
agement, 49-54 ;  Mr.  Morrison  and  Mr. 
Gladstone  on  competition  among,  49, 
50 ;  purpose  of  English  legislation  con- 
cerning, 51 ;  operation  of  competition 
among,  52,  53 ;  pooling  discussed,  53, 
54;  waterways  the  best  regulator  of 
their  tariffs,  54 ;  average  freight  earn- 
ings on  railroads  of  United  States,  56, 
compared  with  rates  by  water  on  Great 
Lakes  and  Erie  Canal,  56,  57 ;  operat- 
ing expenses  in  United  States,  66,  in 
Germany,  66;  cost  of  conducting  trans- 
portation on  railroads  of  United  States, 
78 

Railroads  and  waterways,  complemen- 
tary character  of,  64,  69,  70  ;  resolution 
of  the  Fourth  International  Congress 
on  Inland  Navigation,  72. 

Railway  Commission  of  England,  from 
1847  to  1851,  26 ;  commission  re-estab- 
lished in  1878,  28 

Reading  Railroad,  tonnage,  8 ;  expense 
of  moving  freight  on,  78 

Regulation  of  railroad  rates,  independ- 
ent waterway  best  regulator,  54  ;  Cul- 
lom  committee  on  waterways  as  regu- 
lators, 57,  58;  volume  of  freight  by 
water  may  be  less  than  by  rail,  58 ; 
wide  extent  of  the  influence  of  the 
waterway,  59,  60  ;  this  extent  will  in- 
crease with  growth  in  unity  of  charges 
by  rail,  59,  60 ;  small  canals  have  little 
influence,  60 ;  Van  Ornum  on  water- 
ways as  tariff  regulators,  58;  water- 
ways must  be  independent  of  railroads, 
61 


164 


ANNALS  OF  THE  AMERICAN  ACADEMY., 


Revenues  of  railways,  influence  of 
waterways  on,  63-72;  competition  of 
waterways  helpful,  61-66 ;  this  shown 
by  statistics  of  Main  from  Frankfort  to 
Mayeuce,  64-66,  and  by  tonnage  of 
railroads  near  the  Great  Lakes,  68 

River  and  Harbor  Bill,  110-121 ;  first  ap- 
propriation for  harbors,  111 ;  present 
form  of  bill,  112 ;  the  framing  of  the 
bill  and  its  contents,  113-115 ;  section  7 
of  bill  of  1892  quoted,  113 ;  method  of 
executing  works,  115 ;  our  methods 
compared  with  those  of  England 
France  and  Germany,  115,  116;  our 
methods  criticised,  116-121;  lack  of 
unity  of  effort  and  plans,  116 :  number 
of  works  too  large,  117  ;  log-rolling,  117- 
119  ;  its  cure,  118 ;  driblet  appropria- 
tions, 119;  these  partially  abandoned 
in  bills  of  1890  and  1892,  119-121 ;  the 
bill  has  been  too  harshly  criticised,  121 

Rhodes,  James  F.,  135 

Roberts,  Thomas  P.,  7,  66,  80, 130. 

Sax,  Emil  v.,  109 

St.  Paul,  proposed  canal  from  Great 
Lakes  to,  95, 149 

Schlichting,  Julius  45,  81 

Seligman,  E.  R.  A.,  56 

Bering,  M.,  57,  66 

Sherman,  John,  135 

Squire,  Watson  C.,  148, 151 

State  railroads,  the  relation  of  water- 
ways to,  70-72 ;  this  relation  in  Prussia, 
97 ;  surplus  earnings  ought  not  to  go 
into  the  State's  general  budget,  105 ; 
division  of  costs  Qjf  construction  in 
Prussia  between  central  and  local 
governments,  109 

Stahl,  39 

Supervision  of  waterways  by  the  State, 
the  necessary  extent  of,  93 

Symphner,  cost  of  freight  by  canal,  79 ; 
quoted,  88 

Ships,  their  cost  relatively  to  cars,  78 

Standard  of  life,  influence  of  cheap  and 
rapid  transit  on,  6,  7,  151,  152,  155, 
156 

Steamboats,  kinds  used  on  rivers,  82 ;  use 
of  chain  and  screw  steamers  on  water- 
ways, 82 

Tennessee  River,  conditions  of  naviga- 
tion, improvements,  126, 127 

Tolls,  on  waterways  of  France,  Italy, 
Belgium,  Holland,  England, the  United 
States.  New  York,  Illinois  and  Ohio, 
103  ;  their  abolition  has  aided  naviga- 
tion, 104 ;  the  four  principles  accord- 
ing to  which  tolls  may  be  assessed,  104, 
105 ;  an  undesirable  form  of  taxation, 
105 ;  the  law  according  to  which  tolls 
should  be  levied,  105 ;  the  application  of 
the  law,  106-109 ;  taxing  the  increment, 


107, 108 ;  abolition  of  tolls  on  all  water- 
ways  not  necessary,  109 

Traction  of  boats,  difliculties  in  the  way 
of  steam  traction  on  canals,  80-82; 
electric  traction,  83;  by  locomotives, 
83 

Trade,  dependence  on  transportation,  7  • 
foreign  trade  of  the  United  States 
compared  with  inland  navigation,  9 

Transportation,  importance  of  the  study 
of,  5, 6  ;  social  and  industrial  effects  of 
cheap  rates,  6-9,  151, 152, 155, 156 ;  eco- 
nomic effects  of  cheap  transportation, 
147-155 

Union  for  the  improvement  of  the  canals 
of  the  State  of  New  York,  centennial 
convention  of  1892, 101 

United  States,  waterways  of,  See  "  Water- 
ways ; "  waterways  being  constructed, 
122-129 ;  proposed  waterways,  129-132 

Van  der  Borght,  46 ;  quoted,  69 
Van  der  Sleyden,  81 

Van  Ornum,  John  L.,  quoted  on  water 
ways  as  tariff  regulators,  58 

Washington,  Convention  at,  to  consider 
project  of  a  larger  canal  from  Great 
Lakes  to  the  ocean,  101 

Waterways,  tonnage  on  Great  Lakes,  8, 
Mississippi  River,  8,  Hudson  River,  8  ; 
few  improvements  during  several 
decades,  9;  military  significance  of, 
11, 12 ;  classification  of,  14,  15  ;  the  way 
they  should  be  studied,  16-19  ;  present 
condition  of  English  and  American, 
20-36;  this  accounted  for,  20,  21;  strug- 
gle of  English  railways  with,  22-32, 
length  and  ownership  of  English,  29 ; 
traffic  on  English,  31 ;  condition  of 
waterways  of  the  United  States,  32-36  ; 
manner  of  collecting  statistics  of 
traffic  on,  37,  38;  statistics  of  traffic 
classified,  United  States,  38,  France, 
42;  kinds  of  freight  adapted  to  car- 
riage on,  38-40;  nature  of  freight  on 
waterways,  40,  41,  of  France,  41-43,  of 
Germany,  44-46  ;  effect  of  dissimilarity 
of  dimensions  in  traffic  on,  41-43 ;  they 
are  public  highways,  49;  regulators  of 
railroad  tariffs,  54-62  ;  costs  of  moving 
freight  on,  77-79  ;  interruptions  to  nav- 
igation on,  87,  88 ;  improvement  of 
by  the  State  and  by  corporations,  90- 
102  ;  arguments  for  private  enterprise, 
91-93 ;  for  State  construction,  93-99 ; 
present  study  of  the  functions  of,  99- 
105 ;  tolls  on,  103-109 ;  methods  em- 
ployed by  the  United  States  to  improve 
them,  110-121 ;  leading  waterways  of 
United  States,  122-129 ;  proposed  works, 
129-132 ;  economic  significance  to  the 
United  States  of  the  extension  of,  147- 
156. 


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